MBW’s World Leaders is a regular series in which we turn the spotlight toward some of the most influential industry figures overseeing key international markets. In this feature, we speak to Vivian Wei, Vice President of Copyrights at China-headquartered music streaming platform NetEase Cloud Music. World Leaders is supported by PPL.
NetEase Cloud Music counts a vast number of indie artists on its platform.
At the end of June 2023, The China-based music streaming service reports to have been home to 646,000 registered independent artists. (NCM’s paid monthly users grew 11% to 41.8m at the end of June).
According to NCM, those 646,000 indie musicians have generated over 2.6 million music tracks that are currently available on the platform. NCM also tells us that those artists’ music accounts for around 44% of NCM’s total music streams.
To put those stats into context in the wider Chinese market, China’s largest music streaming company, Tencent Music Entertainment’s most recently reported number of acts on its own indie artist program, the Tencent Musician Platform, stood at 390,000 at the end of 2022.
While not the largest music streaming platform in the Chinese market (that title goes to TME with 99.4m subs at the end of June), NCM wants to position itself as a key fan engagement platform for artists in China, as well as a launchpad for rising independent stars from the West.
Vivian Wei, NetEase Cloud Music
That’s according to Vivian Wei, Vice President of Copyrights at NetEase Cloud Music, who says that NCM “is more like a community than a music streaming platform”.
“We’re a bit like a combination of SoundCloud and Spotify,” adds Wei, who leads the global music licensing, content management system, and distribution teams at NCM. “But we offer the experience for users to share and comment on the music,” adds Wei. “In this community, artists [also] share [content], they’re creating experiences [for] fans.”
Indeed, the standout aspects of NetEase Cloud Music are its social tools, encouraging user-generated content, and enabling listeners to create and share their own music reviews, covers, and playlists.
“The sharing and the very active engagement between artists and fans makes it a very good platform for artists to communicate with their fans,” adds Wei. “That’s how we survive the competition, [including] Tencent Music and all other mainstream platforms.”
According to Wei, NCM’s core social features are driven by a young and highly engaged audience, with around 90% of the platform’s 200 million monthly active users born in the 1990s or later.
NCM tells us that each active user spends around an hour and a half each day listening to music on the platform and that those listeners are increasingly looking beyond local music, with non-Chinese tracks accounting for around 70% of NCM’s total library.
“The high engagement, sense of community, and connection between fans and artists makes us a very good hub for people to discover independent artists and also makes it very natural for independent artists [from the West] to build a connection with their fans,” says Wei.
Commenting further on the listening experience on NetEase Music versus that of the likes of Spotify, Wei stresses that NCM’s users don’t just “open the app and [play music] in the background” but lean into the social aspects of it.
“[Users] read the comments while listening to the songs,” says Wei. “A lot of artists are very smart. They grab this opportunity and they respond in the comment section. They interact and communicate with their fans. It makes it very easy for them to build up a fan base.”
“The sharing and the very active engagement makes NCM a very good platform for artists to communicate with their fans. That’s how we survive the competition, [including] Tencent Music and all other mainstream platforms.”
Vivian Wei, NetEase Cloud Music
One case study cited by Wei of an artist from a Western market who has successfully tapped into the social features offered by NCM and used the app as a gateway into the Chinese market is Canadian rapper bbno$ (Baby No Money).
The artist, whose hits include Edamame featuring Rich Brian and Lalala have been streamed over 400,000 and 900,000 times on Spotify, respectively, has over 700,000 fans on NCM.
“He has a big fan base in China,” says Wei. “He takes a lot of funny videos to interact with his fans [on the platform]. In the past year, with China opening the border [post-Covid], he came to [the market] and toured like crazy. He toured 12 cities [and played] 15 shows and each show was sold out.
“We can find these independent artists and bring their music to China and help them connect with Chinese fans.”
Beyond fan engagement and artist discovery, NCM aims to position itself as an early adopter and investor in AI technologies.
For example, all the way back in 2020, the company invested in a Luxembourg AI firm called AIVA, whose tech it claims is “capable of composing emotional soundtracks for films, video games, commercials and any type of entertainment content”.
In June, NetEase Cloud Music launched its own AI Singer technology. Meanwhile, in its H1 investor update, NCM highlighted X Studio, described as its “intelligent voice synthesis software” developed in partnership with Xiaoice, a startup spun off from Microsoft in China in 2020 that raised $138.4 million last November to reach a $2 billion valuation.
In the wide-ranging and exclusive interview below, NCM exec Vivian Wei gives us an insider’s insight into NetEase Cloud Music’s positioning in the music streaming market, its ambitions to identify and support rising independent acts, and its investment in AI technologies…
What trends are you seeing on the platform in terms of the genres that are going viral from independent artists?
Hip-hop is the global trend now. So on our platform, the top rising genre is hip hop and rap. Second is electronic music. Electronic used to be bigger, but because of COVID, the clubs [in China couldn’t] survive, so it slightly dropped compared to before. But now we’ve noticed on the production side, more and more electronic songs are being produced.
[Electronic music] is slowly coming back. And of course, the other genre that’s worth mentioning is pop, because Chinese people love their Chinese pop songs, like pop ballads.
These three genres account for the [majority] of consumption now. But there are a few interesting rising genres as well, for example, R&B and instrumental music for sleep, and meditation. But that’s a global trend.
What support do you offer some independent artists that you reach out to that are going viral on NCM? Is there financial support, advances etc? how does that work?
Financial support is definitely there, but that is [only] if we do a licensing deal with them. We will consider their content potential and we’ll offer support when we do content deals.
Other support includes recommending their songs, and promotional support, and when they come to China to do tours, we will curate playlist recommendations around their touring activities as well.
“We don’t think we’re an IT company. We think we’re a content company.”
We are the only platform in China that has built a fan engagement tool that is in English. The artists and our label partners can use our fan engagement tool to connect with their fans and also do all these operations themselves on our platform.
This tool is called Fan Connect. And we’re still improving it. We offer tools to connect with fans, and promotional resources.
In terms of content creation, we offer a lot of support as well. [Across the] whole NetEase Corporation, we believe one thing, [and that] is content creation. We don’t think we’re an IT company. We think we’re a content company. We always want to support musicians who are creating music themselves.
When we find an independent artist abroad with good potential, we offer content collaboration, because NCM also has more than 10 content production studios, and we work with a lot of top-class artists in China.
Do you think NetEase Music’s power to break artists in China overlooked by some of the key players in the global music business?
Traditionally artists tend to focus on breaking out in the Western world. They want to be famous in the US or UK as their global development.
But in recent times, we’ve noticed more and more that artists break first in China and achieve popularity on NetEase Music before they gain global success.
For example, the artist I mentioned BBno$. He got popular first in China, and now the influence is becoming more and more global.
It is very important for artists to look at other [markets], because music is global, and especially with social apps like TikTok, artists should look [further] than only the US and Europe. One region’s trends definitely influence other regions’ trends.
There are 646,000 registered independent artists on the platform, what are your predictions for the growth of that number?
Right now, we are [seeing] a 15% to 20% growth every year. So no doubt, in the next five years, this will become a much bigger number.
The growth has been steady. And not to mention the power of AI: making music is more and more accessible and easier than before.
“Everyone can be a music creator nowadays.”
Regarding the global trend of hip-hop, making hip-hop songs is very accessible, because you buy the beats, and [add] your lyrics and you can make songs [easily].
With our support on the music creation tools, and also the AI, the technology development, everyone can be a musician. TikTok says everyone can be a creator. It’s the the same in the music industry. Everyone can be a music creator nowadays. Independent music consumption will also grow more in the future.
On the note of AI in music, we’ve seen a proliferation of AI tools over the past 12 or so months, and there’s a lot more music being made. How is NCM approaching all of this, in terms of the volume of music being created, and do you have any other concerns around AI being used to copy the voices of superstar artists for example?
Our attitude to AI is that we invest in AI, in AI singer companies, in companies that develop AI songwriting, and AI music creation. We have faith that AI is a very good tool to help musicians create and give inspiration, but we don’t think the AI content will ever become [comparative] to human creations.
Music is emotions, and you need to put your emotions into the content creation. If we look at the popular songs, it is not just because the singer is good, right? There are no perfect singers, but we like the imperfections in the songs because that’s the time you really can feel the human emotion.
“We have faith that AI is a very good tool to help musicians create and give inspiration, but we don’t think the AI content will ever become [comparative] to human creations.”
That’s why we invested in all these AI tools and [why] we developed AI singer. But the AI Singer is not to compete with real singers. The AI Singer is to help songwriters to test their demos, to test their songwriting.
For example, for a songwriter, when they write lyrics, they need a demo singer to sing and to find the right “bite” as we say in Chinese about the lyrics.
Without AI Singer, [the songwriter] needs to hire a demo singer, which costs money. Then maybe it’s not good enough, and you need to [change the singer].
It slows down the creation process. But with our AI Singer tool, [songwriters] can [quickly] test the creation and change the lyrics. A demo is produced very easily.
Do you have recent case studies you can tell us about of AI being used by songwriters?
There is a very interesting story. We are an investor in AIVA. They are an AI music creation company based in Luxembourg. Recently, they were visiting me in Shanghai, so I was asking them how it [is all going]. The app is already profitable.
They were telling me a very heartwarming story about an 80-year-old composer. He hasn’t [written] for a long time, and he doesn’t think he can write music anymore. But he noticed this AIVA tool. So he tried to use it and the AI tool was able to help him to write again.
So he said, ‘This is really great. Because it’s my inspiration, because I was not confident enough to write again. I’m already 80. And if it’s only me, I couldn’t write like [I did] before’. Through these use cases, we do think AI is a very good tool to help the creation.
And second of all, you said, nowadays, there’s large quantities of music being produced everywhere.
We live in an abundant society. Everything is excessive. There’s too many videos, too much music content.
[Only a small amount of] content that can be recommended or be consumed [by an individual].
I don’t think too much content is a bad thing because what we noticed nowadays, is that it’s harder and harder to have one superstar because everyone’s taste and the information that is distributed to you is so different.
You can be a star of a [specific] group of people, and there are always going to be people that like all kinds of different music. In the future, it’s still the really good creative work that will win.
Platforms also have a duty to help filter works that are merely uploaded to [those] platforms to try and cheat the system. For example, AI copies, which is not real, genuine creation.
We are also working on this to filter things that are not real works [created] just to cheat the system to get streams. But we do believe that AI is a very good tool for inspiring musicians and helping creators create faster.
What are your predictions for NetEase music’s positioning in a global music business?
We want to be the coolest music streaming platform in China, and the most loved by young people.
Our vibrant, young users are our key audience. We want to be number one, in terms of growth rate. And in the future, we will continue to develop our music recommendation style, and own music tastes.
The membership growth is in a very healthy state, we’re continuing to grow steadily. And as you mentioned, the independent musician community has been growing steadily as well.
So in the future, we want to continue to be the number one music discovery platform and the number one independent music community and bring more interesting social features and more commercial opportunities for artists.
That’s our mission and goal. And globally, we hope to become the bridge for international artist discovery in China.
There also are too few content collaborations between Chinese artists and global artists. So in the future, we want to be the bridge to bring more top artists from the Western world to China to work with Chinese artists. And also to introduce our own music to the world. Chinese music is not only pop ballads, there are cool hip-hop songs from China as well.
World Leaders is supported by PPL, a leading international neighbouring rights collector, with best-in-class operations that help performers and recording rightsholders around the world maximise their royalties. Founded in 1934, PPL collects money from across Africa, Asia, Australia, Europe, and North and South America. It has collected over £500 million internationally for its members since 2006.Music Business Worldwide