Digital Music Industry

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I. Introduction
Many people are still perplexed how ‘you are my love’ (a very popular song on the internet in China) has become popular, which is also considered cheesy from the view point of some mainstream recording industries and organizations. According to Zhang, CEO of the Idol Entertainment Ltd, ‘this represents neither a retrogression of society, nor a down step in terms of culture. It is normally a reflection of the current music market, which is to satisfy the consumers’ demands fundamentally.’ In fact, music online is currently receiving both profit and widespread acclaim, drawing lines with recording industry and traditional music profit modal (Zhang, 2006).

This report aims to give knowledge about several evolutions that have been created in the digital music industry in China, and additionally, to consider some feasible steps to enhance this industry. In order to complete it, several evolution in China’s digital music industry, such as, the wave of TV competition, the change in the scope consumer, and so on, will be mentioned, and dependable steps will be explained.

II. Brief introduction of digital music industry
It is too difficult to find out the exact time and place the music first appeared in humans. In brief, it can be sure that music has been influencing people for thousand years. According to electronic technologies, people have been being to keep music on records since 200 years ago (Huang, 2007). In 1877, Thomas Edison invented sound retention technology which can capture songs. Soon afterwards, the gramophone was created, which support people to save music. In 1987, MPEG Audio Layer 3 (MP3) was first invented, which has ability to satisfy more storage and lead us to a new generation of music called digital music (Huang, 2007).

Over the 5-year time, from 2005 to 2010, the Chinese music industry has faced its huge challenges because of the advanced internet connection (Kennedy, 2010). Comparing with traditional modals, convenience is the biggest change brought about by digital music. On the file-sharing networks, digital music files can be easily found, which also can be translated to be a compression (MP3, PDF, AVI and so on) and exchanged online in a short time (Zhang, 2006). However, people nowadays can conveniently enjoy different types of music using modern tolls (PCs and handset music players like MP3 player, mobile phone). In addition, since digital music was out of blending with physical products, technology companies (Apple’s iTunes and iPod, Real networks, Microsoft), online content providers (Yahoo!, Launch, Baidu), traditional stores (Amazon, Walmart), have acted new roles to sell digital music to consumers on line and created more new areas in digital music industry as well (Illing & Peitz, 2006).

A. Digital music sale
In 2006, the sales volume for global digital music increased sharply, which was near USD 2 billion, representing 10% of the total sales of music around the world (Kennedy, 2006). The digital revenues of music companies grew around 12% globally in 2009 totaling USD 4.2 billion. Some specialists expect that the total value of digital music will hit USD 15 billion by 2010, around 25% of total market sales, while the traditional record CD music market will decrease from USD 27.3 billion to USD19.6 billion. (Kennedy, 2010)

In China, the total sales value of digital music reached RMB 3.6 billion in 2005, which was the first time it exceeded the traditional music market. In the follow years (2007~2008), the sales volume of digital music reached RMB 5.8 billion and RMB 8.1 billion respectively (Zhang, 2006). During the period between 2006 and 2010, the development of digital music has been on the fast track especially when 3G application has provided an unprecedented power for digital music in China (Kennedy, 2010).

III. The evolution of China’s digital music industry
A. Hot TV competitions
In the past, our life was enhanced by the development...
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