Chinas Music Market Surges, But Foreign Artists Face a Complex, Multi-Layered Landscape

In 2025, China’s recorded‑music market grew 20.1 % to become the world’s fourth‑largest market, overtaking Germany, according to the IFPI’s Global Music Report 2026. The jump is powered by a listening base that exceeds one billion people and a paying audience that still has room to expand.

For foreign artists, managers and labels, the headline figures look inviting. Yet the reality on the ground is far more fragmented. China is not a single, unified market; it is a stack of distinct sub‑markets that operate under separate rules, audiences and revenue streams. Paid streaming, short‑video platforms, live concerts, brand endorsements, the idol industry, indie livehouse circuits and the ACG (anime‑comics‑games) subculture each have their own gatekeepers and economic models.

The first hurdle is the performance permit. A foreign act cannot apply for a commercial performance permit directly. Instead, the permit must be secured through a licensed domestic performance agency, and the setlist must receive approval from local Culture and Tourism authorities before tickets can be sold. The approval is tied to a specific venue, date and lineup, and can be suspended during politically sensitive periods.

Sub‑licensing adds another layer of opacity. Contracts that appear to grant a license may actually transfer ownership of the rights to the local partner. A common clause in Chinese deals defaults to a buy‑out—a single payment for a broad transfer of rights. Misreading such clauses can result in unintended loss of control.

Collecting public‑performance royalties remains weak. China’s 2020 copyright law amendment, effective from June 2021, introduced punitive damages for willful infringement and granted sound‑recording producers a right to payment for broadcast or public performance. However, the plumbing that collects those payments is underdeveloped. Two collective societies handle licensing: the Music Copyright Society of China (MCSC) for musical works and the China Audio‑Video Copyright Association (CAVCA) for recordings, particularly karaoke. Registration among foreign rights holders is sparse, and the time between a right being held and money reaching the rights holder can be long.

The 2021 regulatory change also altered exclusivity rules. The Chinese market regulator ordered Tencent Music Entertainment (TME) to relinquish long‑term exclusive lock‑ups it held with global majors. Remaining exclusivity is limited to independent artists for up to three years and a 30‑day exclusive release window for new songs. This window is a competitive tool; for example, when TF Entertainment signed with both TME and NetEase Cloud Music, TME secured the first‑release window.

Tencent Music’s 2025 financial results illustrate the market’s multi‑layered nature. Subscription revenue reached 17.66 billion yuan (US$2.53 billion), up 16 % year‑on‑year, with 127.4 million paying users. Monthly ARPPU was 11.9 yuan (under US$2). Growth in concerts, merchandise and advertising—about 40 %—contributed to the overall revenue increase.

The fan economy adds another distinct layer. Organized fan groups buy digital albums in bulk and fund promotion, driving popularity metrics that differ from passive listening. The scale of fan monetization is regulated under direct political supervision, a feature not present in Western markets.

Examples of how the layers interact include the rise of rapper Lan Lao (SKAI ISYOURGOD). His 2024 single “Ba Fang Lai Cai” went viral on Douyin, generating billions of views. The short‑video buzz funneled listeners to QQ Music and NetEase Cloud, where royalties were paid. The track subsequently charted on Spotify’s Chinese‑language artist list, sold out shows in Singapore, Australia and Europe, and secured a brand tie‑in with Carlsberg.

Brands also operate in a separate ecosystem. For Lunar New Year 2025, lululemon commissioned independent musician Ding Ke to write “Back to Spring,” featuring singer Li Yuchun. The campaign film was released on streaming platforms, illustrating that foreign catalog often fails to convert without a local ambassador.

In sum, China’s music market offers significant revenue potential, but foreign artists must navigate a complex web of permits, licensing, collection mechanisms and market segmentation. Success requires a dedicated local partner who controls the performance permit, manages the sub‑licensing chain and absorbs the risk of last‑minute approval changes.