China prepares to introduce first payment system for legal Internet music downloads

China prepares to introduce first payment system for legal Internet music downloads

Given the rampant piracy in the country that has made Chinese consumers unused to paying for legal digital content, it is little wonder that China is notorious for music copyright infringement (there is even a specific Wikipedia entry for this issue) — as most music sales come from unauthorized downloads of copyrighted music.

The country’s music streaming industry has therefore been known for squeezing international players out — Google shut down its China-only music service in September last year, followed by Yahoo in December.

However, China has been seeking to change the landscape by working with media industry associations to crack down on piracy, and this move has paved the way for online content companies to start charging for legal content.

The payments model will soon arrive in China’s music scene, as the government will test payments for legal Internet music downloads by the end of this year, Wang Lei, the head of Chinese Internet firm NetEase’s mobile music app told Sina Tech (first spotted by Marbridge Consulting).

Relevant authorities will soon release unified pricing standards and other regulations to govern the trial of paid downloads, though specific details are still under discussion, Wang says. He notes that the ultimate model may couple a free listening trial with payment implemented for the full download, and that NetEase has already done the preparations for such a plan.

As of the start of September, NetEase has 6 million registered users on its mobile music app since launching in April. Wang explains that the free listening model is not sustainable, as it is difficult to achieve profitability even within two to three years, and this could hinder its efforts to boost its services and gain more users.

In total, eight major online music services will roll out paid downloads within this year.

It remains to be seen how successful such online music companies will be at getting the Chinese to fork out money for their songs, but this first step hints at a possible future of opening up the market to international legitimate Internet music streaming services — such as Spotify or Pandora.

Headline image via Ian Waldie/Getty Images

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