Will Streaming Platforms Set Restrictions on Certain Music for Free Users?
TENCENT ENTERTAINMENT
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As a dominant and leading force in the Chinese music streaming market, Tencent Music Entertainment (TME) recently made waves throughout the global streaming market with an operational experiment.
Tencent initiated a plan to boost its revenue by making some content exclusive and only available to paid subscribers.
This is a practice defined as putting something “behind a paywall”.
What is a Paywall?
The strategy involves making content by some artists only available to paying members.
The paywall can either be maintained permanently, or for a certain period defined by the creator.
While the practice has been experimented with in the past on a very limited basis by streaming giant Spotify in the United States, the company currently stands firmly opposed to it.
Pay·wall (/ˈpāwôl/)
noun
(On a website/internet use) An arrangement whereby access is restricted to users who have paid to subscribe to the site.
Tim Ingham, founder, author and publisher of Music Business Worldwide stated that TME has implemented a form of paywalls for certain content across its streaming platforms in China.
As noted above, TME dominates the streaming landscape in the region, maintaining a whopping share of 84%.
This is due in large part to TME’s ownership of music streaming platforms like QMusic, Kuwo, and Kugou.
Kuguo holds the distinction of being the larget music streaming in the world as it boasts almost 450 million active users.
Reaping the Benefits of a Paywall
TME attempted to implement paywalls on certain content earlier this year.
The Company claims that the results were positive as they hold the paywalls responsible for a boost in their paying subscriber base.
The boost during the company’s 2nd quarter pushed their paid subscriber numbers to over 30 million.
In a recent communication to investors, TME’s lead strategy officer Tony Yip explained “The amount of content being put behind a pay-for-streaming paywall at the moment is still a very small percentage of our total [but] this is just the beginning, and we will continue to do more”.
Paywall Experiments Gone Wrong
There have been some clear examples in the past of paywall experiements that have not been successful.
Tim Ingham pointed out that country artist Jason Aldean’s release “Rearview Town” in 2018, was one of a select few albums to be placed behind a paywall on Spotify
The album went on to be a success in accumulating large streaming numbers but it was not enough to compel other artists or labels to try a similar tactic.
We will see what the future holds in terms of how other music streaming giants will respond to the paywall strategy.
If TME’s paid subscriber base continues to increase based on paywalls, surely other platforms will jump on board.
Time will tell.
Kevin James has over 20 years of experience in the entertainment industry in various facets. He has worked as a recording artist, songwriter, producer, on-air radio personality, background actor and film director. Kevin is a Member of the National Writer's Union.
As a business owner myself, I think this is a smart initiative. This is a great way to monetize while offering some content/products/services for free. The same goes for magazines or online newspapers that decide to make some content exclusive to their paid subscribers.