Music Is Recovering, but Hits Are Getting Rare. What Happened? | QDaily's 2016 Year in Review

Ask yourself, and the people around you: what was the song of 2016? How many different answers do you get?

Picking 2016's song of the year turns out to be very hard — not for want of popular music, but because in an era when the standards for judging popularity have splintered, defining "popular" is itself no longer easy.

Start with what did well in 2016. To keep this objective, we relied mainly on two measures: sales on the major music platforms, and the Baidu Index, which tracks mainstream search activity in mainland China.

Jay Chou — Jay Chou's Bedtime Stories. Sold 1,118,700 copies on QQ Music, first by total sales revenue.

Li Yuchun — Wild Growth. The album collects four EPs: Wild, Untamed, Grow and Thrive. Together they sold 6.18 million copies on QQ Music, with Wild, released first, accounting for 3.39 million on its own — second by total sales revenue. While the album was officially on sale, Li Yuchun's Baidu Index hit its 2016 high of 77,000.

Xue Zhiqian — Actor. The song came out in 2015 but only caught on in 2016. Two things make it an outlier here: it was never sold in digital form, and Xue Zhiqian the person scores far higher on the Baidu Index than the song does. His 2016 peak was 394,000, and he spent most of the year hovering around 120,000; the song's peak was 33,000.

Xu Jiaying — her songs from Season 4 of I Am a Singer. Before 2016 her Baidu Index sat around 1,000. After the show it climbed to nearly 130,000.

Luhan — Reloaded+. Sold 1.28 million copies on QQ Music, seventh by total sales revenue. Luhan averaged more than 146,000 on the Baidu Index in 2016.

SNH48 — Dream Island. An EP made for voting in SNH48's third general election. Buying it came with a chance to vote, so fans rushed it: more than 100,000 copies in the first hour.

Rainbow Chamber Singers — Zhang Shichao, Where on Earth Did You Put My House Keys. An article in April reported that the song had been played more than 900 million times. Then in July another of the group's songs, I Feel Like My Body Has Been Hollowed Out, swept social media all over again.

Zhang Yixing — Lose Control. The six-track digital album went out exclusively through Alibaba Music — its Xiami Music and Alibaba Planet platforms — on October 28. By November 30 it had sold 1 million copies.

On the numbers alone, that list should already cover the hottest songs and albums of 2016. Each has a large following of its own — a set of small kingdoms, each with near-absolute authority inside its own borders.

But set them against other entertainment and, by Baidu Index, they are not "that hot." The Korean drama Descendants of the Sun peaked close to 2 million; Season 4 of I Am a Singer, widely seen as a shadow of its old self, still reached nearly 600,000 while it aired.

By 2016, calling a song a viral hit said nothing about how far it had actually traveled; the label had come to describe a style instead. Take the Rainbow Chamber Singers' Zhang Shichao, Where on Earth Did You Put My House Keys: at a Baidu Index of about 8,500, it is far weaker than Phoenix Legend's 2012 The Most Dazzling National Style — less than a tenth of it.

We also found that new music has a harder and harder time holding attention. In the week Jay Chou released Aiyo, Not Bad! at the end of 2014, his Baidu Index averaged more than 100,000. By the middle of this year, when Jay Chou's Bedtime Stories came out, that number had fallen to 70,000. Given how much the ground for spreading anything changed in those two years, the 70,000 is worth even less than it looks.

In short, music is becoming a more and more niche affair. The signs have been showing for several years; 2016 is when they peaked.

This was the year the long-depressed music industry showed signs of recovery, as more listeners grew willing to pay. But in that recovery, the industry's ability to command attention and manufacture hits only got weaker.

Start With Xue Zhiqian

Apple Music recently named its album of the year for China: Xue Zhiqian's Beginner.

How Xue Zhiqian became famous in 2016 has a touch of black comedy to it. What first drew wide attention was a video. In an interview with CCTV he mistook a live broadcast for a recording, and the nonsense that came out of his mouth turned into a hot topic. Next, the jokes he had written on Weibo were dug up, confirming him as a gag writer. Only then did the music get its turn — Actor, Gentleman and Ugly were pulled back out and took the top spots on QQ Music and every other chart.

In short, Xue Zhiqian did not become famous as a musician. He became famous as a gag writer, and the music came along as the free item thrown in.

The most surprising part of all this may be that Ocean Butterflies Music, the label that signed him, appears to have done nothing at all. Xue Zhiqian told The Beijing News: "Even Ocean Butterflies is basically an outside contractor. They only turn up to help when I put out a record. And even during a promotion period they won't do marketing for me, because there's no budget."

That is puzzling, because in theory a label's job is to package the musicians it signs and push them into the market by every means available. But Ocean Butterflies is no exception: nearly every label now works this way.

The main reason is the collapse of the record business. In 2014, Taihe Rye Music, then China's largest label, took 70% of its revenue from copyright licensing and digital mobile music, and most of what its artists earned came from endorsements, ads and films. So Taihe Rye decided to stop signing singers and stop making records.

At the end of 2015, Duan Zhongtan, general manager of Rock Records, said much the same: "The record business is so unsound now that labels won't invest in new talent anymore."

The more serious problem is that even if the record business recovers, the labels can no longer turn it around. Warner Music is the case in point — it was once called the Palace of Divas for having A-Mei, Stefanie Sun and Na Ying on its roster at the same time.

In 2014 Warner signed Li Ronghao for what it called its largest signing fee, and in January 2016 released his third solo album, Ideals. Li Ronghao's Baidu Index barely moved all year. By QQ Music's charts the album's best-performing song was Won't Settle, and even that did not beat his earlier Model and Li Bai.

By comparison, his Baidu Index once passed 810,000 during Season 3 of I Am a Singer. Which means that even a label as big as Warner can do far less for a musician's promotion than a single variety show.

In the past, a label really had only one way to promote a musician. Apart from press conferences and signing events, the main tool was getting radio and television stations to play its artists' songs a few more times and so raise their exposure. The industry called it chart-pushing.

That system has plainly stopped working. "As the channels opened up, people's attention got more and more scattered, and mainstream media doesn't carry the influence it used to," Ji Cheng, head of publicity at Wanyou Music, told QDaily. People have far more ways to entertain themselves now, not just radio and television, so the audience for any one of them is much smaller.

How listeners come across music has changed too. "Before, we listened to whatever the label packaged for us," Cao Chuan of QQ Music told QDaily. "Now users have much more room to pick the songs they want to hear, and the relationship between users and artists is going to change."

For labels that is a fatal blow. As the Harvard Business School professor Anita Elberse writes in Blockbusters, the traditional label runs on heavy investment: it puts hundreds of thousands, even millions of dollars behind one musician and hopes to make the money back on a hit.

Now that chart-pushing no longer works, labels are worse and worse at producing hits, so they turn conservative and stop putting real money into developing artists. And once they leave artist management for good and become custodians of the copyrights on records they released long ago, their influence over the music business goes with it.

Who Replaced the Labels?

The labels' retreat and the death of chart-pushing left two holes in China's music industry: artist management and music marketing. The demand did not go away, and a crowd of companies is trying to fill it. If 2016 stood out for anything, it is that those two jobs — once fairly separate — began to merge.

Wanyou Music is the pop-concert brand of Jucheng Network, and it has staged shows for Haomeimei Band, Chen Li, Cheng Bi and Kousuke Atari. To Ji Cheng, live performance has become a crucial part of how a musician builds an audience: "(Live shows) are more about experience, more solid. The numbers may not be as big as online traffic, but the rate at which they turn people into fans is higher."

Being a promoter is not enough for them. In 2016 Wanyou signed two independent acts, Reban Band and Xinya, and will make their albums the way a traditional label would. There will also be tours — which is where Ji Cheng thinks Wanyou differs from a label in artist management.

Moving from concerts into artist management has a successful precedent: Modern Sky.

Modern Sky began as a record label, but as the industry sank it ran up more than 2 million yuan in debt at its lowest point and was down to three employees. Live performance was the weight that brought it back up: as the Strawberry Music Festival spread to more than a dozen cities, Modern Sky found its footing in the business again.

In 2016 Modern Sky made no secret of wanting musicians under its roof. The rock singer Xie Tianxiao signed with it through his own studio; Maggie Cheung joined after singing at the Strawberry Music Festival; and in November it signed Edison Chen and Vinida back to back and set up the hip-hop label MDSK.

"Why has Modern Sky succeeded?" one person in the music business said to QDaily. "Because the dozens of festivals they run every year are one enormous roadshow for their artists."

Promoters aside, internet platforms of every sort are also looking for closer ties with musicians.

After Baidu Music was folded into Taihe Music, it restarted its Baidu Musicians program and brought in Liu Jin, formerly head of Douban Music, to vet it. NetEase Cloud Music said it would spend 200 million yuan supporting independent musicians. That leaves out Alibaba Music and QQ Music, which started musician programs earlier still — Alibaba with its Seeking the Light project, QQ Music with a livestreaming service called DEMO Musician.

Weibo is doing it too. Yang Wei, Weibo's director of music product operations, pointed to 1022 Girls in an interview with QDaily. The trio is made up of three students from the Beijing Contemporary Music Academy. Weibo works with them on what kind of content travels best on the platform, and drives traffic to them through Fan Headlines, video-stream recommendations and trending-topic promotion.

Asked by QDaily, most of the internet platforms said they were only platforms, not really in the business of artist management. The truth is far more complicated than that.

Some online music services have in fact built their own teams to sift through the music musicians upload, and to promote the ones that suit their taste.

And because these platforms' businesses are so tangled, there is plenty of room for them to improvise. Haomeimei Band, for one, took part in Heilan Home's "One More Gram of Warmth" charity campaign through an introduction from NetEase, and wrote a theme song for it. That overlaps with the label's old job of picking artists and brokering their commercial work.

None of this resembles the supply chain of the record era, when labels developed the artists and made the music, then sent it out through radio and television.

Now concerts and internet platforms are the channels, and those platforms are using their direct contact with listeners to push back up the chain, into developing artists and making music.

The old marketing — television, radio, press conferences, signing events — may still work, but it stopped mattering long ago. Even the big-name musicians and their labels now lean on the new system: Jacky Cheung, Li Yuchun and Jay Chou are all willing to release digital albums on QQ Music.

A new model, one that can replace the old record system, seems to be slowly taking shape.

Who Can Keep Making Hits?

The music industry should be grateful for this new system, which has filled the holes the record business left behind. Labels no longer spend big on developing musicians, but promoters and platforms both need content, so both have reason to grow artists of their own.

After radio and television collapsed, the internet and live shows took chart-pushing's place. They can talk to listeners directly, which has helped the industry answer the question of where its consumers are.

As a business, once physical records vanished, concerts, digital albums, streaming subscriptions and even merchandise further down the chain could all be sold through the new system, and pay musicians back.

But a new problem came with it: by what standard do you make music and be sure it will be popular enough?

Zhang Zhaoyi, senior director of strategy at LeEco Music, gave an example. Pang Mailang's My Skateboard Shoes took off on Bilibili at a time when the site's guichu remix culture was also booming and throwing off viral videos like Lei Jun's Are You OK. But when Pang Mailang's second song, Devil, Don't, went up on Bilibili — with four guichu creators enlisted to draw the video — the response was flat.

There are many examples like it. SNH48 caught fire, but the girl groups that copied it did not, and even SNH48's own Beijing and Guangzhou offshoots have nothing like its pull. There is only one TFBoys; the other boy bands built on the same young-teen formula went almost unnoticed. Copying the last success to manufacture the next hit does not work.

Zhang Zhaoyi put it this way: "There are more and more pipes for marketing music, more and more chances in the market, and it's harder and harder." As for how to actually do it: "We're all figuring it out together."

One likely response is to fall back on the acts that already sell — the same pursuit of safety that gives Hollywood its sequels.

Labels pull in their lines and bet on a few sure things, as Nick Gatfield, former CEO of Sony Music UK, put it: "You can't have 50 artists sitting on a long-term development list. That will bankrupt you. You need some quick money, you need superstars."

The other response is to treat whatever hit happens by accident as a template. Everyone wants to reproduce Xue Zhiqian's rise, but all anyone can do is imitate it. Musicians' attention gets scattered across every kind of publicity stunt, which can drag down the music and drive still more of the audience away.

Has Independent Music's Moment Come?

China's independent musicians looked busier than ever in 2016.

Beijing Workers' Stadium holds 40,000 people and is usually thought of as a stage only top-tier singers reach. Yet back in 2015, an independent act like Haomeimei Band was already playing its own concert there.

Chris Anderson, who wrote The Long Tail, once said that once consumers find — and can afford — products closer to their own taste, they stop paying attention to the bestsellers. That reads like a description of China's music industry now and where it is going: more and more independent musicians will surface, each with a following of its own.

Plenty of tools and platforms look ready to help them get there. As noted above, the online music platforms are putting resources into independent musicians, and Weibo's social platform can help a musician find fans...

Each of these routes has its own threshold — in our conversations, the platforms usually mentioned that a musician has to build up a base of fans first, and only then do the platform's resources follow — but that is not an impossible task. "Buyi, Miserable Faith — a lot of the early musicians built their whole brand through livehouses," Cao Chuan of QQ Music said.

Zhongyueji, an independent label founded in 2015, calls itself "a new kind of music company." Every album it puts out is a compilation of many musicians, which solves the problem of building an early audience. Then it uses tours to gather fans offline, turn them into fan groups, and from there generate income for its musicians.

Whether the model works is still unknown. As Chen Hongyu said: "If you do anything to do with art, either you get famous and make a lot of money, or you don't make a cent and live miserably. There are very few people in the middle, and that's the unhealthy part of it... So most musicians still need a steady income from some other job."

Behind this sits another problem that the new system of promoters and platforms cannot solve: the habit of paying for music in China has improved a great deal, but it is not yet mature.

Weibo sells single-track downloads and splits the money with musicians. But as Yang Wei put it, "this is more a proof that the work has been recognized" than anything else. How many people pay depends on how many loyal, high-quality fans the musician has already gathered.

Li Yuchun's Wild Growth took in more than 30 million yuan on QQ Music, about what a single one of her concerts makes at the box office. One album a year already counts as prolific, while a tour can run dozens of dates, so album sales are clearly not where most of Li Yuchun's money comes from.

As for live shows, Ji Cheng said: "The concert market isn't all that promising right now. Most people are still losing money just to make some noise."

How to solve that, the whole music industry seems to have no good answer. All they can do is stay hopeful about the future. The digital-album sales that kept climbing through 2016 may be reason for some confidence, but a real sigh of relief is probably still a few years off.