Music copyright is gradually circulating! Yu Chengqing's song of Zhang Shaohan reappeared on NetEase Cloud Music

The copyright of the works of Yu Chengqing, Na Ying, Zhang Shaohan and other singers returned to Yuncun. On April 6, Nandu reporter learned that netease cloud music and Fumao records officially "held hands" recently, and the two sides will carry out in-depth cooperation in the fields of music copyright and artist promotion.

At present, NetEase Cloud Music has obtained the copyright of all artists' songs under Fumao Records. NetEase Cloud Music users can listen to the works of many well-known artists including Yu Chengqing, Fan Weiqi, Na Ying, Zhang Shaohan, Wei Lian and many other well-known artists within three months.

Nandu reporters took stock and found that since the landing of anti-monopoly supervision in July last year, the music copyright previously represented by Tencent Music has gradually circulated. In the past year, NetEase Cloud Music has signed direct digital distribution contracts with three major record companies, and reached copyright cooperation with music labels such as Modern Sky and Emperor Entertainment.

Songs by Yu Chengqing, Fan Weiqi and others were lit up in NetEase Cloud Music

According to Nandu reporters, Fumao Records was founded in 1961 and has a variety of music libraries such as Chinese pop, European and American pop, classical music, film and television soundtracks (OST), and has created many classic music works. For example, Yu Chengqing's "Gap", "Love Must Be Enough", "Let Me Love Enough at Once", Fan Weiqi's "Initial Dream", "Right and Wrong", Na Ying's "Black During the Day And Night", Zhang Shaohan's "Invisible Wings", Wei Lian's "Slowly Etc.".

According to the data disclosed by NetEase Cloud Music, as of 2021, the number of monthly active users of netEase Cloud Music platform will reach 183 million, and more than 90% of active users will be post-90s; as of 2021, daily active users will listen to songs for an average of 78.2 minutes per day, and nearly half of users will browse the comment area when listening to songs, and 3.2 of every 10 songs are recommended by the platform.

NetEase Cloud Music said that its unique music community attributes can not only improve the efficiency of music content distribution, but also help to enhance the interaction between singers and young user groups under Fumao Records.

Nandu reporter learned that this is the work of musicians under Fumao Records who returned to Yuncun after more than 3 years. The relevant person in charge of NetEase Cloud Music told Nandu Reporter, "Fumao Records was previously transferred to NetEase Cloud Music by Tencent Music Group (TME) and was removed from the shelves in July 2018. ”

According to Tencent Entertainment, in July 2015, Tencent's QQ Music reached an exclusive copyright strategic cooperation with Fumao Records, and was fully responsible for Fumao's exclusive promotion, management and distribution in Chinese mainland, including digital music copyright construction, digital music album release and music works promotion.

The above report disclosed that QQ Music's exclusive copyright partners also include more than 20 excellent record companies at home and abroad, such as Warner, Sony, YG, LOEN, CUBE, JVR, Emperor, Huayi, Lehua, Dream of Course, Shaocheng Times, Warner Lyrics, etc., and more than 200 genuine copyright partners.

This time, NetEase Cloud Music obtained the full music copyright authorization of Fumao Records, which means that users will no longer see the gray song list when playing songs by Yu Chengqing, Fan Weiqi and others in Yiyun Village.

Also on April 6, TME announced that it had launched an exclusive music campaign with Fumao Records. Since 2015, the two sides have reached an in-depth strategic cooperative relationship. Based on the consensus of cooperation for many years, TME and Fumao Records will deepen cooperation around "content co-creation" and bring special projects such as "golden song cover" to music fans.

NetEase Cloud music library of 80 million songs, payment rate of 15.8%

It is worth noting that on March 24, NetEase Cloud Music disclosed its first financial report since its listing on the Hong Kong Stock Exchange on December 2, 2021. According to the financial report, NetEase Cloud Music's revenue in 2021 increased by 42.93% year-on-year to 6.998 billion yuan; the continuous loss during the year was 2.056 billion yuan, compared with a loss of 2.951 billion yuan in the same period last year; and the adjusted net loss narrowed by 33.4% year-on-year to 1.044 billion yuan.

Although it has not yet turned a loss into a profit, the gross profit margin has changed from negative to positive. Thanks to the increase in profitability, content optimization and cost optimization of copyright structure, NetEase Cloud Music achieved a positive gross profit margin of 2.0% for the whole year of 2021.

In terms of revenue composition, NetEase Cloud Music is mainly based on two aspects: online music services and social entertainment services. Among them, the revenue of online music services in 2021 reached 3.29 billion yuan, an increase of 25.4% year-on-year. Its monthly paying users increased by more than 80% year-on-year to 28.9 million, and the payment rate increased to 15.8%.

The increase in membership subscription income may be related to the continuous enrichment of the content of netease cloud music library. NetEase Cloud Music disclosed in its financial report that by the end of 2021, the content library contains about 80 million music tracks, of which about 1.9 million are from independent musicians, an increase of about 80% over the end of 2020. The number of independent musicians on the platform exceeded 400,000, ranking first in the industry.

At the same time, NetEase Cloud Music is also actively acquiring high-quality content from music labels. The relevant person in charge of NetEase Cloud Music told Nandu reporter that in the past year, the company has reached copyright cooperation with Modern Sky, Hong Kong Emperor Entertainment, China Record Group, Lehua Entertainment, Fumao Records, etc.; reached direct agreements with the three major record companies; and announced the copyright cooperation with many original musicians, including Xie Chunhua, Taiyi, MoXizishi, Liu Haolin and other well-known original musicians' early music works, further enriching the platform's high-quality original music content.

NetEase Cloud Music said, "The gradual circulation of music copyright is re-stimulating the vitality of the Chinese music market." ”

Music exclusive rights were broken, and the industry returned to product and service competition

The exclusive model of music copyright has been broken, which is inseparable from regulation. On July 24, 2021, the State Administration for Market Regulation (SAMR) announced that Tencent's failure to declare its acquisition of the equity of China Music Group in July 2016 constituted an illegal concentration of undertakings, and ordered Tencent to take necessary measures such as "removing the exclusive music copyright on the Internet" to restore market competition.

For this antitrust regulatory measure, NetEase Cloud Music expressed its support in the earnings report, "because it promotes the healthier development of China's online music industry as a whole", while listing important cooperation with music labels in 2021.

For example, in the second half of 2021, new copyrighted music from popular labels such as Modern Sky, Emperor Entertainment Group, China Record Group, Fenghua Qiushi and Lehua Entertainment will be added. In addition, in August 2021, NetEase Cloud Music reached a direct agreement with Warner Music Group, "which means that we have direct digital distribution contracts with the world's three major record labels." ”

According to Nandu reporter, in May 2017, Tencent collected the exclusive music copyrights of Universal Music, Warner Music and Sony Music, and since then, platforms such as NetEase Cloud Music need to obtain the copyrights of the three major record companies through Tencent's sub-authorization.

This "exclusive copyright + sub-licensing" model once caused industry controversy. Some insiders once told Nandu reporters that when the copyright is exclusively owned by one company, other music platforms can only negotiate with it, and some songs are not necessarily sold by the other party. This amounts to direct control over the source of the competitor's content.

After the above-mentioned anti-monopoly supervision landed, the copyright competition pattern in the industry was broken. The State Administration for Market Regulation ordered Tencent to terminate the exclusive copyright agreement on digital music and to stop the payment of high upfront fees. This idea of market supervision continues into this year's industry supervision.

On January 6, the National Copyright Administration interviewed a number of digital music-related enterprises, requiring record companies, songwriting copyright companies, and digital music platforms to adopt an authorization model that conforms to the rules 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 must not sign exclusive copyright agreements except in special circumstances.

With the intervention of regulation, the online music copyright market ushered in new changes. NetEase Cloud Music mentioned in the financial report, "The industry presents a favorable trend of more reasonable copyright fees and cost structures, which provides us with flexibility to optimize content investment in a more standardized and predictable way." ”

It is worth mentioning that on March 22, Tencent Music's 2021 Q4 and annual financial reports were released. According to the data, Tencent Music's total revenue in 2021 was 31.24 billion yuan, an increase of 7.2% year-on-year; online music paying users exceeded 76.2 million, an increase of 36.1% year-on-year, the online music payment rate reached 12.4%, and the number of people settled in music increased to 300,000.

Nandu reporter noted that the two major head music platforms mentioned in the financial report that they will continue to innovate and improve products and services. It is not difficult to find that after the music exclusive copyright model is broken, the industry needs to think more about how to continue to exert efforts in products and operations, attract users with high-quality content, improve user viscosity and conversion of paid users.

Written by: Nandu reporter Li Ling