Company looks to build ecosystem more reliant on internet tech

Lights down, music on, and a grassroots singer steps onto the stage. It's the competition for the uncovering of a new singing star, held by a popular music app that is part of Tencent Music Entertainment Group, one of the country's largest musical service operators.

The music firm has promoted the program for months to support grassroots artists who shot to fame via WeSing, a karaoke singing and sharing app run by TME. Up to 1.9 million grassroots singers have participated in the program so far and composed 1.6 million songs.

Singers who enter the final stages of the competition will receive rewards and tailor-made promotions. In addition to this, the backstage partners of the top three winners, including lyricists, composers and producers, are also given rewards.

"It's a win-win initiative," said Dennis Hau, group vice-president of TME. "Fresh musicians get more look-ins, professional training, as well as higher earnings, and our platforms benefit from a collection of professional music."

He added that the company is exploring a better business model to further enable these talented grassroots musicians, including promoting their works on online music platforms, such as QQ Music and WeSing, and during offline variety shows.

The move marks TME's latest step in building an internet-enabled, technology-driven ecosystem that revolutionizes the way music is consumed, according to Lu Zhenwang, senior internet analyst from Shanghai-based Wanqing Consultancy.

"As a giant in the field, TME has been scrambling to build a well-rounded ecosystem and has done quite well in innovating both its upstream and downstream businesses," Lu said.

He added that the digitalization of the music industry is injecting more vitality into Chinese society.

QQ Music and WeSing, TME's two major units, which are under the charge of Hau, provide a rich catalogue of digital music services including streaming, online live broadcasts and karaoke.

"We are trying to create an inclusive ecosystem. Users can listen to music and watch music videos via QQ Music, sing karaoke online through WeSing and then share it with friends," Hau said.

The latest data from the company shows that WeSing tops the list of the country's online karaoke portals, with around 500 million registered users, while QQ Music has a total of more than 800 million registered users.

One example of the way TME is driving growth, Hau said, is through "digital albums", a new form of internet-era album sales that QQ Music created and has dominated since 2014. The albums allow fans to download songs of their favorite musicians before they are made available in the public domain.

The idea has proved to be extremely successful. Last year, the digital album of Chris Lee, a famous singer from China, was snapped up by 1.14 million people with the sales volume exceeding 23 million yuan ($3.65 million), making it the top-seller on QQ Music since the creation of the platform.

Sales of two digital albums by US singer Taylor Swift netted more than 10 million yuan in revenue for the Tencent platform.

Latest data show that QQ Music now has a more than 90 percent share of the country's digital album market.

By adding more ammunition to its ecosystem, the Shenzhen-based company is leveraging more advanced technologies to offer customers a better user experience.

"We are taking advantage of the listener data from users and the singing behavior to personalize our music services. The services can also recommend musical choices of friends to listeners," Hau said.

He said WeSing has promoted a "virtual karaoke room" wherein friends can join together to sing songs online and simulate the environment and sound effects of real karaoke.

In terms of globalization, Lu from Wanqing Consultancy said that China has entered the golden period of digital music and has the ability to catch up with the rest of the world, something that echoes with TME's capabilities.

At the end of last year, TME made an investment in Spotify, the world's largest music streaming service provider, by acquiring an undisclosed stake, representing another step forward in its going global efforts.

"We anticipate great development prospects in the overseas markets," said Hau, who used to be responsible for globalization of Tencent's major products.

"China has become an important growth engine for the global music industry and we want to be a world-leading musical platform," Hau said.