Sticking to the original intention, or stuck in his own way, can Ding Lei continue to be a music community with peace of mind?

Following Zhihu, this year, another unicorn company that focuses on community product forms, NetEase Cloud Music, has been successfully listed, once again proving that the community product form is suitable for the Chinese market. Theme + community product portfolio framework, by the UGC + KOC creative form to fill the content breadth and depth of the platform community, NetEase Cloud Music from the beginning of the establishment of the music community model, after more than 8 years of development, has formed a complete community format.

From beginning to end, the development goal of NetEase Cloud Music is the music community

In April 2013, NetEase officially released a strategic new mobile product, NetEase Cloud Music, announcing its entry into the field of digital music. Ding Lei said that NetEase Cloud Music is directly aimed at the development of mobile Internet, positioned in the form of "mobile music community", in order to form a user-centered music ecosystem, around the discovery and sharing of music, characterized by users' social interaction, to establish a circle belonging to individuals.

Ding Lei believes that the mobile Internet is a new opportunity in the music industry, with three characteristics of mobility, cloud services and socialization, which will revolutionize the dissemination, experience and consumption of digital music. "Products and operating models based on the PC era will become obsolete, and most of the music products on the market are still stuck in the era of player tools, do not have the salient characteristics of mobile applications, lack user interaction, and provide homogeneous, low-quality content."

Facts have proved that Ding Lei's judgment is correct, the entire online music market has undergone a major change, and a large number of old tool-based online music products such as Everyday Sound, Shrimp Mi Music, Kuwo Music, and Kugou Music have either been acquired or have withdrawn from the market. NetEase Cloud Music, which adheres to the community model, is widely popular with young users with its unique community product experience and user-generated music reviews.

According to the prospectus data, the number of monthly active users of online music services from 2018 to 2020 was 105 million, 147 million and 181 million, respectively, of which the proportion of post-90s music users has reached 89%. NetEase cloud music products have music, podcasts, live broadcasts, K songs, sound theater, radio and other functions to increase its content, and the "Cloud Village" launched in 2019 has strengthened the community capabilities of NetEase Cloud Music, and since then, it has also launched "Cloud Circle", "Kangan" and other functions to continue to dig deep into the gameplay and value of the community, songs + UGC content + interaction + interest group to enhance the stickiness ability outside the music copyright content and create a sense of community belonging.

Tasted the sweetness of communityization, and continued to deepen the ability of the music community after the listing

As users' requirements for online content become higher and higher, community-based products that can focus on "like-minded" groups are gradually favored by the public, and the community-based products such as Douban, Zhihu, Tiger Punch, Little Red Book, B Station, and Idle Fish are all successful. Film and television + community, Q&A + community, sports + community, life + community, two-dimensional + community, second-hand + community, and NetEase Cloud Music's music + community, etc., rich in content, and breadth, and deep community is extremely sticky to users.

Southwest Securities Research Report pointed out that the development of NetEase Cloud Music Company has mainly gone through three stages: the first stage (2013~2015) to operate an online music platform; the second stage (2016~2017) to deepen the personalized content community; the third stage (2018 to date) to develop diversified music derivative business. After the listing, Ding Lei plans to continue to strengthen the community-based ability of NetEase Cloud Music.

Ding Lei said in the listing open letter of NetEase Cloud Music: "What will NetEase Cloud Music become in the future? In my opinion, it may be more like a universe of sounds. Music, podcasts, live streams, K-songs, sound theater, radio... The form of the content will be quite rich. In the future cloud village, there will be more novel content, gameplay, and means, so that users can change from passers-by to participants, so that everyone is a creator. Before, maybe you just listened to someone else's song. In the future, you will leave more footprints of your own. The addition of more and more creative forces will improve the infrastructure of Cloud Village bit by bit, so that NetEase Cloud Music will become "one song and one village". And here it will be because you are more prosperous and imaginative. NetEase Cloud Concert continues to increase support and investment for musicians. We hope that when you want to dream of music, you don't have to worry about whether the talent has the stage or not. ”

Translated over, the next step of NetEase Cloud Music is to improve the quality of community content through product function development and community operation, on the basis of UGC, to mine KOC, and to support the development of original music. Ding Lei once said in an interview, "NetEase Cloud Music still has to do one thing, that is, to build the industrialization of Chinese original music, so that everyone can make high-quality Chinese original songs together." ”

According to the data, in June 2021, NetEase Cloud Music actively participated in UGC creation monthly active users accounted for about 27%, the total number of UGC song lists was about 2.8 billion, the platform settled more than 300,000 independent musicians, and musicians uploaded more than 1.4 million works. From this point of view, Ding Lei's expectations for NetEase Cloud Music are not only users to create comments, sharing and other content, but also the music community built in the future will encourage users to create music.

At present, the mainstream music is in the hands of several major record companies, the copyright of others will inevitably hinder the development of NetEase Cloud Music, if NetEase Cloud Music itself can produce a steady stream of high-quality original music, the profitability will be truly reflected, which is also the ultimate value of the community. When we were still watching NetEase Cloud Music at the 3rd layer, Ding Lei had already built the future of NetEase Cloud Music from the perspective of layer 5.

Sticking to the original intention, or stuck in his own way, can Ding Lei continue to be a music community with peace of mind?

However, the market will not develop exactly according to the script formulated by Ding Lei. Ding Lei wants to make music seriously, but the audio and video markets are interconnected, and the threat of cross-border competition is pressing on NetEase Cloud Music step by step. The diversion effect of short video platforms on users is becoming more and more obvious, and Tencent Music and NetEase Cloud Music have launched video sections, but they cannot keep up with the impact of short video content.

According to the prospectus information, from the end of 2020 to the third quarter of 2021, NetEase Cloud's monthly active users increased from 181 million to 185 million, only about 4 million monthly active users. From 2018 to 2020, the number of monthly active users of NetEase Cloud Music online music services was 105 million, 147 million and 181 million, respectively, and it is clear that the user growth rate of NetEase Cloud Music is declining significantly.

In addition, in the total revenue of NetEase Cloud Music in the first three quarters, the revenue of the online music sector increased from 1.85 billion yuan in the same period of 2020 to 2.44 billion yuan, the revenue of social entertainment and other sectors increased from 1.52 billion yuan in the same period last year to 2.67 billion yuan, the revenue of online music services accounted for 47.7%, and social entertainment services and other revenues accounted for 52.3%, and the revenue capacity of community-based has begun to appear. But NetEase Cloud Music's monthly active users on social entertainment services have been falling from 20.4 million in June 2020, 19.4 million in December 2020 to 19.1 million in June 2021.

When NetEase Cloud Music fell into the dilemma of users' monthly active life, Tencent Music also had the same problem. In the second quarter of 2021, Tencent Music's online music service mobile monthly active users were 623 million, down 4.3% from 651 million in the same period last year, and mobile MAU for social entertainment services was 209 million, down 13.3% from 241 million in the same period last year.

Ding Lei wants to be a music community, but the foundation of the music community is that it needs to have a large number of user support, continuous output of content and music, and when the overall user growth stagnates or even loses, the corresponding part of the users with the ability to create content and original music will also flow to other larger platforms. If Douyin and Kuaishou also want to fully develop the online music business, the user growth problem of NetEase Cloud Music will be more difficult.

Gu Yuehao is an independent writer for Forbes China. Individuals have opened a personal column "Science and Technology Valley Theory" on more than 60 news media platforms in China, focusing on the in-depth observation and comments of the science and technology circle.