Tencent Music Management Adjustment Music copyright in the domestic digital music industry will be fully opened

Figure: Figure worm

On January 11, Tencent Music Entertainment Group (TME) announced that Hou Deyang, vice president of the group, head of the international business and assistant to the CEO, will leave for personal reasons. Tencent Music also announced that the company's independent director Mai Youji will succeed Edith Manling Ngan as the chairman of the audit committee, effective immediately. Edith Manling Ngan will continue to serve as an independent director and a member of the Audit Committee.

It is reported that Hou Deyang served as vice president of Tencent Music Entertainment Group in 2016, and was fully responsible for the operation and management of QQ Music, and was successively responsible for QQ Music, National K Song and international business. Previously, he worked at Oracle Corporation, Tencent Group Enterprise and Development Group (CDG) and former Social Networking Business Group (SNG).

The music industry environment has changed a lot over the past year. On the policy side, the State Administration for Market Regulation has ordered music streaming platforms to remove the exclusive copyright of online music; on the industry side, newly emerging Internet entertainment products are also changing the way users traditionally contact and consume music.

Shrimp rice delisted, Cloud Village listed

Two major events have happened in the Chinese music market in 2021, one is that Shrimp Music shut down its service at the beginning of the year, and the other is that NetEase Cloud Music was finally listed at the end of the year.

This setback is set against the backdrop of antitrust investigations into the Internet sector throughout 2021, and exclusive copyright, the moat of the online music market, has ushered in stricter regulations in 2021.

From the top three to the top two, some people say that the territory of the online music industry is frozen in 2021, this view has traces in the Internet field, such as cat's eye and ticket sales, such as Douyu (DOYU) and Huya (HUYA), after the formation of the industry TOP2, each has entered a stable development track.

After the shutdown of Shrimp Rice, NetEase Cloud Music accelerated the listing process. In May 2021, NetEase issued an announcement that it intends to spin off Cloud Village and list it independently on the main board of the Hong Kong Stock Exchange; in August, the listing process of NetEase Cloud Music pressed the pause button until it was officially listed on the Hong Kong Stock Exchange at a price of HK$205 near the end of the year.

After the listing, only NetEase Cloud Music and TME are left on the market, but in terms of volume and commercial capabilities, NetEase Cloud Music is "shorter" than TME.

In terms of commercial capabilities, NetEase Cloud Music is bleeding and listing, and TME is continuously profitable.

According to the prospectus, netease cloud music's revenue from 2018 to 2020 was 1.1 billion yuan, 2.3 billion yuan and 4.9 billion yuan, respectively; the net loss in the three years was 2 billion yuan, 2 billion yuan and 3 billion yuan. In three years, NetEase Cloud Music's revenue was 8.3 billion yuan, and the loss was 7 billion yuan. TME, which landed in the U.S. stock market earlier, has been able to generate stable profits, and in the same period, the net profit of Tencent Music Group was 1.833 billion, 3.982 billion and 4.155 billion, respectively, totaling nearly 10 billion yuan.

In terms of revenue volume, there is a huge gap between the two. In the first quarter of 2021, TME's total revenue increased by 24.0% year-on-year to RMB7.82 billion and net profit was RMB979 million. In the third quarter of 2021, Tencent Music Group's revenue was 7.8 billion yuan, and netease cloud music's total revenue in the first three quarters of this year was only 5.1 billion yuan.

The National Copyright Administration expressly prohibits the signing of exclusive copyright agreements

Recently, the National Copyright Administration interviewed major domestic record companies, songwriting copyright companies and digital music platforms, etc., requiring that the record companies, songwriting copyright companies and digital music platforms of all parties in the digital music industry should be settled through the model of guaranteed gold plus actual usage share, and exclusive copyright agreements must not be signed except in special circumstances to jointly maintain the order of digital music copyright and build a good ecology of digital music copyright.

This indicates that the music copyright of the domestic digital music industry will be fully opened.

In the previous "copyright war", the pattern of the online music market has gradually become clear, of which Tencent music platforms such as Kugou Music, QQ Music, and Kuwo Music occupy the main market, while NetEase Cloud Music, the second player in the market, was successfully listed in December last year; Migu Music mainly relies on the channel-side advantages brought by China Mobile in the third camp. Kuaishou of the short video platform launched the original music platform "Huisen", and Douyin internally tested its first music application - "Soda Music".

After the end of the era of exclusive copyright competition, increasing user stickiness and willingness to pay is the key to the subsequent development of online music platforms.

With the lifting of the exclusive copyright of the platform, the music platform is no longer limited to the competition of copyright content, but has risen to the competition of multiple dimensions such as diversified services and content of the platform. It is expected that in the future, online music platforms will create a pan-entertainment platform with online music as the core, expand social entertainment and other fields, enrich the experience of online music users, broaden user payment channels, and cultivate user payment habits.

In the post-epidemic era, online music platforms will continue to innovate, and will further expand new formats of IOT all-scenario services such as car music and TV music to enhance user stickiness and thus achieve competition breakthroughs.

The first shot in the domestic music metacosm

On the evening of the cross-Chinese New Year's Eve, QQ Music held the TMELAND Virtual Music Carnival. TMELAND encompasses digital twins, virtual performances, immersive experiences, and social connections, and can be seen as the prototype of a musical "metacosm.".

This is the first online virtual music world in China, and it is also another meta-universe concept product handed over by an Internet giant after Baidu launched Greece and TianxiaXiu launched Honnverse.

In September last year, Tencent registered the "QQ Music Meta-Universe", at that time everyone was still confused, did not know what the mystery of this "meta-universe, now look, Tencent Music has a great momentum to reshape the entire music industry in the post-epidemic era." In this virtual world called TMELAND, users can not only create their own avatars to explore music and interactions digitally; they can also experience virtual concerts and live broadcasts "immersively".

According to official data, a total of 1.1 million music fans entered the TMELAND Virtual Music Carnival on New Year's Eve, equivalent to 12 full-seat concerts at the National Stadium (Bird's Nest), with nearly 100,000 people interacting online at the peak.

"The content industry is a bilateral market, and the more demand there is, the more power there is." A music industry source said. QQ Music continues to introduce new scenes and functions to attract new consumers, which is also a positive stimulus for content creators.

In fact, in the new music consumption environment, music products can not only be tools, but also have ecology. As a more valuable music platform, it should not only allow users to have enough music and audio content to consume, but also provide more support for content producers.

Source: Late Post, Interface News, Sina VR, public information, etc

Editor: Lu Taoran