Recently, on social platforms such as WeChat and Weibo, many users are "asking" for app invitation codes for soda music.
Red Star Capital Bureau learned that Soda Music is a product of ByteDance (hereinafter referred to as Byte), which is a song listening platform for young people who love music trends, and is currently opening up internal tests on a small scale, and users can use the invitation code to register and log in.
Infographic According to Visual China
According to the information on the official website of the China Copyright Protection Center, as early as February this year, the "Soda Music Android Software" has completed the registration of software copyrights, the current version number is V1.0.0, and the copyright owner is Beijing Microcast Vision Technology Co., Ltd., an affiliated company of ByteDance and the operating entity behind Douyin.
Nowadays, soda music has been listed on the app store of iOS and Android systems, although it is only the internal testing stage, it has also satisfied the appetite of netizens, and many netizens said: Douyin Divine Comedy finally has to have a home.
Source: China Copyright Protection Center official website
With the landing of byte's independent music streaming platform, Byte has also officially entered the Chinese online music market, can the "menacing" soda music rewrite the status quo of the domestic online music market? What challenges will the two major players in the market, Tencent Music (NYSE:TME) and NetEase Cloud Music (HK:09899), face?
Part I:
Byte layout music, from overseas to domestic
In September 2016, Byte's short video platform Douyin was officially launched, and its product was positioned as "music creative short video social software", which was destined to have an inseparable connection between Byte and music.
Public data shows that from June to December 2018, in just half a year, the number of domestic monthly active users of Douyin increased from 300 million to 500 million.
The explosion of vibrato is inseparable from the explosive short video, and the explosive content is often inseparable from four key points: "full-screen HD, music, special effects, personalized recommendations", and the value of music is constantly highlighted.
Also in this year, Douyin reached cooperation with a number of record and songwriting copyright companies such as Universal Music, Warner Music, Universal Songwriting, Taihe Music, etc., and began to focus on supporting original musicians and initially involved in the music industry chain.
But Byte's vigorous layout of music has to start from overseas.
In November 2017, Byte acquired music video app Musical.ly for $1 billion and officially merged with TikTok in August 2018. By merging with Musical.ly, TikTok's cold-start cycle in the U.S. has rapidly shortened.
According to a 2022 study by MRC DATA, 75% of TikTok users in the United States said they would discover emerging musicians through TikTok, and 63% said they would discover new musical works at TikTok.
TikTok complemented the advantages of Musical.ly, allowing Byte to taste the sweetness of music content power overseas, and then Byte began to officially test the music streaming business.
In March 2020, a music app called Resso under Byte was launched in India, Indonesia and other countries, and this music app is still taking the social route, while recommending personalized music to users through algorithms.
To some extent, TikTok forms a closed ecosystem with Resso.
When using TikTok, users in the region can directly jump to Resso to listen to the full track or jump to the app store to download Resso by clicking on the soundtrack link of the short video, and in Resso users can generate cards for songs, lyrics and backgrounds, share them on other social platforms including TikTok, and also create short video content of corresponding music.
According to public information, as of May 2021, Resso had 10 million daily active users.
Back to the domestic current internal test of soda music, the official introduction shows that soda music mainly promotes the four functions of radio, personality recommendation, synchronous vibrato and tens of millions of song library, sets up three first-level entrances of "play", "discovery" and "home page", and adopts the visual playback mode of sliding up and down, and the main single recommendation. Overall, soda music is more similar to Resso.
Source: App Store
There is no doubt that Byte wants to copy the logic of TikTok and Resso to Douyin and soda music, and the overseas experience has added a lot of confidence to Byte's layout in the domestic music market.
In addition, according to the "2020 Douyin Music Ecological Data Report" released by Douyin, the total number of hit songs in the top ten in 2020 is as high as 94.5 billion. In addition, in the "Top Ten Hot Songs of the Year" announced in the Tencent Music Entertainment Festival in recent years, most of the music was once popular on the short video platform, which shows the great influence of the "Douyin Divine Comedy" in the domestic music market today.
From 2021 onwards, byte's action in the domestic music sector has also accelerated significantly. For example, in April 2021, the establishment of the music division was announced; in June, the "Music Player" was launched in the internal test of Douyin (the "Listen to The Whole Song" function was added); in July, the music was upgraded to a P1 priority business, which was on a par with the game and education business; and at the end of July, the new music agency distribution platform "Galaxy Ark" was internally tested.
All this shows that there are long-term preparations for online music streaming bytes, and the domestic market is being intensively laid out.
Part II:
Independent music platform, where does the confidence come from?
When it comes to the advantages of Byte, most people will think of the huge traffic of Douyin and the commercial value behind the huge traffic; but as far as independent music platforms are concerned, combined with the current situation of domestic online music streaming, we believe that byte's confidence mainly comes from two aspects.
1. The flame-out of the copyright war
The mainland online music market has experienced a relatively long period of chaos, when due to the imperfection of music copyright, online music has emerged in an endless stream, and users at that time achieved "freedom to listen to songs".
In 2015, with the release of the strictest copyright order in history, the Notice on Ordering Online Music Service Providers to Stop Unauthorized Dissemination of Music, the entire industry also quickly entered the period of "copyright" and "exclusive copyright", a large number of small and medium-sized music platforms have withdrawn due to high copyright costs, and domestic online music has gradually shown a competitive pattern of Tencent Music (QQ Music, Kuwo Music, Kugou Music) and NetEase Cloud Music.com.
In February 2018, the National Copyright Administration posted a document on its official website entitled "The National Copyright Administration Promotes Tencent Music and NetEase Cloud Music to Reach Copyright Cooperation", and Tencent Music and NetEase Cloud Music mutually authorized musical works, reaching more than 99% of the number of their own exclusive music works.
In July 2021, the State Administration for Market Regulation (SAMR) issued an administrative penalty decision against Tencent, ordering It and its affiliates to take measures to restore market competition by removing exclusive music copyrights within 30 days, stopping payment methods such as high advance payments, and not requiring upstream copyright owners to give them conditions that are superior to competitors without justifiable reasons. In August 2021, Tencent Music issued the "Statement on Giving Up the Exclusive Licensing Right of Music Copyright".
On January 6, 2022, the National Copyright Administration interviewed major record labels, songwriting rights companies and digital music platforms in Beijing. The interview stressed that all record companies, songwriting copyright companies, and digital music platforms should adopt an authorization model that conforms to the laws of music dissemination, the principle of fairness and reasonableness, and the rules of international practice, and should be settled through the mode of guarantee and actual usage sharing, and shall not sign exclusive copyright agreements except in special circumstances. At this point, the era of exclusive copyright is basically over.
So, the bytes that entered the music track caught up with the good timing. What Byte needs to do now is to negotiate copyright cooperation with various copyright owners, according to LatePost's September 2021 report, two people close to ByteDance said that Byte's investment in copyright from June to September 2021 is not less than 1 billion yuan. Although the road to buying copyright may still be relatively long, the flameout of the copyright war has cleared the biggest obstacle to the online music business for Byte.
2. Strong social advantage
At present, domestic online music streaming giants Tencent Music and NetEase Cloud Music have been listed, from the financial report, their revenue is mainly composed of online music service revenue (membership payment, advertising, etc.) and entertainment service revenue, of which entertainment service revenue is an important source of revenue for the platform.
The company's financial report shows that Tencent Music's entertainment service revenue has always remained above 60% of total revenue, mainly due to the national K song. NetEase Cloud Music Entertainment Service revenue accounted for 49.58% of total revenue from 23.38% in 2019 to 49.58% in the first half of 2021, mainly because netEase Cloud Music has "crazy" live broadcasting and other social businesses on the platform in recent years, resulting in a significant increase in this revenue.
Source: Company Financial Report, Red Star Capital Bureau
Online music streaming platforms need to rely on "music + social entertainment" to monetize, mainly due to the late cultivation of mainland users' paid education, resulting in mutual restrictions on the amount of single-user payment and payment rate, and under the premise that the paywall cannot be improved, the imagination space of member paid income is limited, and this set of logic is also applicable to domestic long video streaming media.
For Byte, there are many content producers, strong user stickiness, and strong natural entertainment attributes on Douyin, which makes Byte have certain advantages in the realization of "music + social entertainment". The idea of entertainment before music may also have more possibilities.
Part III:
Can soda music change the pattern of China's online music market?
Nowadays, Byte is constantly integrating and opening up the upstream and downstream industrial chains of online music, including key nodes in the music industry chain such as playback, content production, publicity business, and copyright operation. But for soda music, the challenges ahead are still enormous.
First of all, from the perspective of market competition, there are many new and old players on the domestic online music streaming track. Old players still have an advantage in the user base and copyright, and new players are also frequent. For example, Kuaishou has tested the waters of online music many times, and launched music APPS such as "Komori Singing" and "Huisen", which are involved in music creation and user K songs.
Secondly, from the perspective of platform recognition, the influence of "Douyin Divine Comedy" is indeed very strong, but it also labels "Saliva Song" and "Lack of Nutrition" for "Douyin Divine Comedy". Soda music comes with its own short video gene, which may inevitably lead to this controversy, and whether overly entertaining music can play the long-term value of music is also worth pondering.
According to LatePost, the copyright purchased by Byte is currently more inclined to original songs, as well as signing long-term cooperation with Internet celebrities. In the short term, this may be to temporarily avoid fighting with old players head-on; but in the long run, this may also affect the user's positioning of soda music and affect the recognition of the platform.
Therefore, there is still too much uncertainty about whether soda music can make China's online music market "change the sky".
brief summary:
The battle of China's online music market is no longer more than capital than copyright as it was a few years ago, but more than the efficiency of content distribution and product experience innovation on the platform. The official launch of soda music may bring many surprises to the market and sound the horn of a new battle.
Red Star News reporter Yu Yao Liu Mi
Edited by Tao Yueyang
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