Per reporter: Xie Tao Per jing editor: Tang Yuan
In the post-epidemic era, the digital trend of the cultural and creative industry has become prominent, and in the field of "ear economy", the "audio giants" represented by Tencent Music, NetEase Cloud Music and Himalaya have accelerated their layout and seized the next traffic "outlet".
"For today's young people, listening to music, watching live broadcasts, and visiting the community has become a habit, especially in the post-pandemic era, which has become one of the most important ways to socialize." NetEase Cloud senior music anchor Yihang shared.
A few days ago, NetEase Cloud Music, which has been labeled "niche" and "literary" since its inception, released its 2021 annual financial report under the attention of thousands of investors and the expectations of countless "melon-eating masses", triggering heated discussion in the market.
As a "fever" user of NetEase Cloud Music, today we will take this opportunity to talk about the ups and downs of the "ear economy" in recent years.
Music Copyright Dispute Players scramble to build a moat
The outside world attaches great importance to this financial report of NetEase Cloud, and it is not too much to describe it as "thousands of calls to start out".
However, after the release of the financial report, NetEase Cloud's desire to boost the stock price fell short. According to the financial report, in 2021, the total revenue of NetEase Cloud Music was 6.998 billion yuan, an increase of 42.9% year-on-year, and the adjusted net loss was 1.04 billion yuan; the online music service MAU was 182.6 million, an increase of 1.2% year-on-year...
To sum up, NetEase Cloud's latest financial report mainly has two major discussion points, one is that the core business online music service is still losing money; the other is that users have not achieved high growth as expected by the outside world.
Speaking of core business, for any player who wants to lay out the online music industry and build a business ecology, music copyright is a threshold that cannot be bypassed. Music copyright is the entrance ticket, but also the "burning money", but also the "Achilles heel" that restricts many players from further "fighting monsters and upgrading". And this problem has plagued NetEase Cloud for many years.
Time back to the end of 2014, the veteran singer of the Chinese music industry is still not old, the traffic singer has not yet completely "ascended", QQ Music, Kugou Music and NetEase Cloud Music have launched a protracted "fight" around music copyright.
In the following years, with strong capital advantages and platform advantages, Tencent Music expanded strongly, winning the exclusive copyright agents of many head record companies including Warner, Sony, Emperor, Huayi, etc., while NetEase Cloud Music competed with independent musicians and a growing music community.
However, in the "attack on the city" of music copyright, Tencent Music is "the only one", and NetEase Cloud and so on are gradually falling behind. At the beginning of 2021, the shrimp music that has been walking in the rivers and lakes for 12 years has left the scene, which is lamentable. In the summer of the same year, in view of the chaotic copyright dispute, the State Administration for Market Regulation offered the "great killer" of "lifting the exclusive copyright order". It seems that the copyright issues that plague online music platforms have ushered in spring?
For a long time, the Chinese music scene has had such a legend: "Jay Chou wins the world" - every time Jay Chou releases a new song, it easily occupies the hot search of social media; every time the topic of comparison with "small fresh meat" will detonate Weibo. Everyone's definition of "half of the country" in the Chinese music scene is different, but in the field of online music, the head musician represented by Jay Chou is undoubtedly the "half of the country" that major platforms are competing to chase.
Although, NetEase founder Ding Lei said on many occasions, "as long as the copyright is released, it will be open to buy." NetEase Cloud has indeed spent a lot of real money and silver, and has expanded cooperation with five companies such as Modern Sky, Emperor Entertainment, China Records, Lehua Entertainment and Fenghua Qiushi Culture, and has "pocketed" the works of singers such as New Pants and Wu tiaoren, and well-known singers such as Wang Feng have also settled in "Cloud Village".
But now on the NetEase cloud platform, a considerable number of songs by leading singers in the Chinese music scene such as Jay Chou and Mayday are still in a state of unopened copyright. The lack of copyright of such core competitive content has made it difficult for NetEase Cloud to build a more solid "moat", and the attraction of the platform to users has been correspondingly reduced.
According to the financial report, the number of monthly active users of NetEase Cloud Music Online Music Service in 2021 was 183 million, an increase of only 1.2% year-on-year. Compared with other mainstream players, its user growth is showing fatigue.
Liao Xuhua, an analyst in the interactive entertainment industry at Analysys, pointed out that the copyright dispute is also the content dispute, which is the core of the competition in all content industries, and NetEase Cloud Music will not give up the procurement of music copyright because of losses, which will continue.
So next, can NetEase Cloud Music find its own "Jay Chou" as desired?
Independent music is still the "signature" NetEase Cloud accelerates socialization
Independent musicians have always been the "golden signboard" of NetEase Cloud, and one of the "housekeeping skills" of NetEase Cloud. According to the financial report, by the end of 2021, the number of independent musicians in NetEase Cloud Music has exceeded 400,000, and 1.9 million music tracks have come from independent musicians.
"NetEase Cloud provides a comprehensive development platform for many independent singers like me, who can record songs, send songs, live broadcasts, and spread some of the most intuitive feelings to listeners." There is a creative atmosphere and interactive atmosphere that creators like. When talking about the attractiveness of "Cloud Village", Yihang said.
Thanks to the active independent musicians and labels, NetEase Cloud continues to attract a group of paying users to pay for its music works and content. NetEase Cloud's latest financial report shows that the number of monthly paid users of its online music service reached 28.9 million, an increase of 12.9 million year-on-year.
However, it can also be seen that in the past few years, in addition to the landlord's cat, Xie Chunhua and other head independent musicians, most of them are independent musicians in the middle tail. In the "ear economy", although independent musicians can meet the needs of some audiences, their influence obviously cannot be compared with those head musicians who "hold bull ears". The two are very different in terms of song popularity, dissemination, creativity and subsequent IP development.
In addition, in the total song library of NetEase Cloud, 1.9 million original songs, accounting for less than 3%, are also difficult to build a complete "moat" for NetEase Cloud.
Image source: Per reporter Xie Tao
In contrast to the performance of the online music service business, NetEase Cloud's social entertainment business has steadily improved. From 2018 to 2020, the revenue of NetEase Cloud's "social entertainment services and others" segment was 120 million yuan, 540 million yuan and 2.2 billion yuan respectively, while in 2021 this figure became 3.7 billion, an increase of 63.1% year-on-year.
This is inseparable from NetEase Cloud's "increased" investment in the field of social entertainment services and the expansion of profit channels. As disclosed in the financial report, the live broadcast service has become the "big head" of netease cloud music social entertainment service revenue.
It is reported that since 2018, NetEase Cloud Music has "tested the waters" in the field of live broadcasting, and has successively launched products such as "LOOK Live", "Sound Wave" and "Sound Street". In 2021, NetEase Cloud also successively launched the "Music Spectrum Collection" and "Beat Trading Zone" to increase the social entertainment attributes of the platform.
However, for NetEase Cloud, which has been focusing on "the world's largest music community" since its listing, how to maintain a balance between providing users with a variety of social entertainment services and maintaining a niche, literary and artistic community atmosphere is a headache.
The scale is really difficult to "grasp". With the high frequency of updates of NetEase Cloud, most of them are related to social entertainment business. "Cloud Village, you have changed", "Feel like you have come to another vibrato", "NetEase Cloud what about your original intention?" Similar comments continue to emerge, reflecting the voices of some users under the mix of gameplay and rules.
Players run into the audio industry ushered in a change
In the past 2 years, with the emergence of short videos. More and more singers and songs "jumped out" of the original platform and publicized and disseminated on the short video platform. The pattern of the rivers and lakes has changed.
Previously, the 2021 China Music Marketing Development Research Report conducted a questionnaire survey of 116 music industry practitioners. The results show that the short video platform has become the most important channel for the music industry's publicity budget flow, and "brushing the screen in the Douyin station" has become the second place in the "mass communication success standard" during the song promotion period.
Since the "opening" of music rights last year, more and more new players are running into the market, and platforms such as ByteDance and Kuaishou that sit on hundreds of millions of traffic are trying to get a piece of the "ear economy". For example, ByteDance accelerated the launch of its first music APP "Soda Music"; Kuaishou continued to increase its weight and launched a musician support program.
In addition, in various subdivisions of the track, Himalaya, lychee FM, Dragonfly FM, etc. have been "killed" from a large number of players, becoming the industry's leading players, such as "copper wall iron wall" to form a pinch on the latecomers.
Taking podcast programs as an example, podcastEr Yino from Shenzhen launched programs on the two platforms of Himalayas and NetEase Cloud Music very early on, which were deeply loved by young listeners. In her opinion, "Compared with NetEase Cloud, Himalaya has created a better podcast ecosystem, provided perfect podcast hosting services, and more comprehensive and rich background data." ”
Surrounded by strong enemies, the living space of NetEase Cloud is constantly being compressed, and the gap with other players is revealed. Taking monthly active users as an example, in 2021, NetEase Cloud's monthly active users will be 183 million, which is less than Douyu's latest monthly active data of 192 million, and the 272 million monthly active users announced by Station B in 2021 are also far behind.
In the future, how to maintain the previously hard-established status? And how to achieve a break?
Combing the strategic layout and business composition of NetEase Cloud, it can be seen that in addition to continuing to invest in the social entertainment services mentioned earlier, NetEase Cloud may further expand the scale of independent musicians, dig deep into the high-quality IP, and improve user stickiness and conversion rate. As a high-quality creator, Yihang suggested, "As the competition between music anchors becomes more and more fierce, NetEase Cloud can tilt more traffic to some 'cloud village elders' who have a relatively stable audience and creative ability, encourage their creation, and increase interaction with users." ”
Another incremental track is to create a composite music entertainment ecology. In the future, music consumption will inevitably have a closer scene correlation with entertainment forms such as short videos and live broadcasts. Ding Lei also clearly pointed out that content video is one of the important directions of NetEase in the future.
However, it is worth thinking about whether at the moment when new players continue to pour in, in the process of rapidly changing the market competition pattern from homogenization to differentiation, is NetEase Cloud's video content "overtaking in curves" or "helpless to change lanes"?
Daily economic news