In China, "The fashion for user-generated music … shows that content is becoming more and more important" and, "users often care more about content than about the service itself".

The shocking revelations come in a BDA China brief which also says revenues from "wireless music" are now bigger than sales of traditional music, and growing faster than SMS (Short Message Service), "although SMS revenues remain the largest WVAS in China as in other more mature economies."

China's 2005 wireless music market was worth RMB 2 billion ($247 million), estimates China Audio & Video Association head Liu Guoxiong, quoted by the BDA.

China's ring tone market took off in 2005 and China Mobile's revenue from CRBT in 2005 was RMB 3.4 billion ($420 million), a 303.5% increase on 2004, says the report.

At China Unicom, CRBT revenue rose 190% to RMB 790 million ($98 million).

Thus, "Observing this huge demand, mobile operators decided the SPs should not have all the fun, and have made moves to enter the wireless music market themselves," says the BDA.

"China Mobile has set up its own music portal to provide music downloads and CRBT subscription services, and teamed up with MTV to roll out its wireless music billboard in April 2005.

"Meanwhile, China Unicom regards 2006 as 'The Year of Music' and is promoting wireless music as a key WVAS product nationwide through its Uni portal. China Unicom Guangdong in October 2005 established a mobile music alliance with SPs and CPs to promote the development of wireless music content."

However, there's a sour note.

"Digital music copyright is a regulatory and legal grey area in China, and conflicts and lawsuits between music SPs and CPs are common," the brief states.

The Music Copyright Society of China (MCSC) was originally the key distributor for domestic and global music labels but last year the Big Fir Organized Music cartel, "switched to dealing with China Record Corporation, seeing it as better-suited to handle copyright protection issues.

"For distribution, the four deal with Beijing Yuanquan (R2G). R2G developed China's first centralized digital music distribution platform, and is emerging as a leading distributor for global music labels. It currently has the rights to distribute music from Universal and Sony-BMG, as well as over 30 domestic labels. In most cases, distributors such as MCSC only hold rights for the music composition or lyrics, but not for actual recordings. SPs therefore still need to negotiate directly with music labels to use actual recordings."

Also See:
BDA China - China’s mobile music market hits the high-notes, April, 2006

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