Chinese music streaming giant Tencent Music Entertainment is experimenting with driving revenue by making some content exclusive and unavailable to its ad-supported users. It's a practice once popular in label circles but vehemently opposed by streaming leader Spotify.
According to Music Business Worldwide’s Tim Ingham, Tencent Music Entertainment has introduced paywalls for some content across its streaming platforms in China. TME, which operates Q Music, Kuwo, and Kugou, is the dominant streamer in the region with an aggregate 84% market share.
TME tried paywalling content earlier this year and the company says it helped to drive growth in its paying subscriber base, which topped 31 million after adding 2.6 million during the company’s second quarter, according to recent financial filings.
“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,” TME’s lead strategy officer Tony Yip told investors.
Previous Paywall Experiments
The paywall strategy, which includes making content by some artists only available to paying members, either permanently, or for a ‘windowed’ period immediately after launch, was tried in the U.S. without much success.
As Ingham noted, country artist Jason Aldean 2018 release “Rearview Town” was one of the few albums to be windowed on Spotify and while the album proved to be a success, apparently not enough to inspire other artists to window their own content.
Even Taylor Swift, who has been a vocal critic of Spotify’s ad-supported streaming model, released her most recent studio album “Lover” — as well as all of her other albums, too all of Spotify’s users on the same day.
While it’s too soon to say if windowing will return to streaming services in North America, it is likely that both streaming services and rightsholders are interested in the potential revenue stream.