NetEase Cloud Music senior management change: former senior vice president Zhu Yiwen left and Zhang Dong took over

Interface News Reporter | Wu Yangyu

Interface News Editor |

News on March 9, Interface News exclusively learned from people familiar with the matter that Zhu Yiwen, former senior vice president (SVP) of NetEase Cloud Music, has now left, and his position is taken over by Zhang Dong, the former head of the marketing department. At the same time, Cao Sijun, the former chief technical officer (CTO) of NetEase Cloud Music, has also left.

As of press time, NetEase Cloud Music has not commented.

It is understood that Zhu Yiwen began to coordinate his departure with NetEase Cloud Music from the second half of 2022. During this period, he stepped down as a legal person, executive director and manager from Hangzhou NetEase Cloud Music Technology Co., Ltd. and other NetEase Cloud Music affiliates in November last year, and was succeeded by Zhang Dong.

Judging from the historical development trajectory of cloud music, Zhu Yiwen's departure is not surprising.

As a manager with a technical background, Zhu Yiwen graduated from the Department of Computer Science of Zhejiang University and the Department of Computer and Information Technology of Fudan University respectively. In 2006, after a brief stint at IBM, Zhu Yiwen joined NetEase Research Institute in Hangzhou, where he was responsible for the technical development of NetEase blogs and served as the product leader of NetEase SNS community "Dream Life". 

In 2012, Zhu Yiwen was appointed as the product director of NetEase's latest music project, NetEase Cloud Music Prototype, and Wang Lei, another important figure in the early days of Cloud Music, was responsible for product planning, development and product operation.

With the launch and rise of NetEase Cloud Music, in April 2016, Cloud Music was upgraded from the music product center under NetEase Hangzhou Research Institute to NetEase Music Division. During this period, Zhu Yiwen also completed the leap from the position of senior product director to the position of CEO of Cloud Music. 

However, since then until 2020, NetEase Cloud Music under the leadership of Zhu Yiwen has rarely performed brightly. On the one hand, streaming music platforms are caught in copyright disputes, NetEase Cloud Music is at a disadvantage, losing a large number of users, and daily activity growth has encountered bottlenecks; On the other hand, cloud music has passed the incubation period and entered the commercialization stage, but its revenue performance is not satisfactory.

According to the NetEase Cloud Music prospectus, from 2018 to 2020, its annual revenue was 1.1 billion yuan, 2.3 billion yuan and 4.9 billion yuan, respectively, with an annual growth rate of more than 100%. Behind the revenue growth, Cloud Music's three-year net loss reached 2 billion yuan, 2 billion yuan and 3 billion yuan, respectively.

This may have planted the seeds for Zhu Yiwen's departure. According to a late LatePost report, at the end of 2020, Zhu Yiwen, as the CEO of NetEase Cloud Music, was "internally demoted", and his rank has not changed for the time being, but NetEase CEO Ding Lei has taken up the job of NetEase Cloud CEO and is in charge of the actual business. At that time, people familiar with the matter said that the reason behind the adjustment was that Zhu Yiwen was not recognized in terms of increasing revenue and innovating business.

The change was confirmed in NetEase Cloud Music's prospectus submitted to the Hong Kong Stock Exchange in May 2021. According to the materials, Ding Lei is also the executive director, chairman of the board and chief executive officer (CEO) of NetEase Cloud Music, and Zhu Yiwen is the senior vice president of Cloud Music, responsible for the overall management of the company.

The direct reason for Zhu Yiwen's departure is unknown, but when it comes to the performance of cloud music in the past two years, he may not have found strong evidence to prove that he can lead the rapid development of cloud music again.

According to the financial report, after entering 2021, cloud music's revenue temporarily doubled, and the revenue in the first half of 2022 (as of the time when Zhu Yiwen started the resignation process) increased by 33.8% year-on-year. At the same time, the two core revenue sectors of cloud music, online music service revenue and social entertainment services and other revenue, although the scale of related paid users has increased significantly, the monthly revenue per paying user of online music services has decreased from 6.8 yuan in the first half of 2021 to 6.5 yuan in the same period of 2022, and the monthly revenue per paying user of social entertainment services has decreased from 526.5 yuan to 329.8 yuan. This not only means that the willingness of newly absorbed paying users is not strong, but also shows that the willingness of former paying users to pay has declined. 

In addition, the closure of Cloud Music's K song app "Yin Street" is also a footnote. A NetEase Cloud Music insider once told Interface News that the main reason for the closure of Yin Street was that "the scale could not be done" and "the two responsible persons left." The person said that both leaders were hired from outside, and one of them had held a key position in the national karaoke.

Regarding Zhu Yiwen's successor Zhang Dong, it can be confirmed that Zhang Dong is the current head of the marketing department of Cloud Music, and this position has also undergone several changes. 

NetEase Cloud Music's vice president of marketing was once served by Li Yin. Li Yin worked for 7 years and left in February 2021, during which she made a lot of contributions to the scale of cloud music users, brand equity and user intelligence. According to the interface news reporter, after Li Yin left, the marketing department business was briefly taken over by Wang Yuqiang, and then Zhang Dong took over with full power, and Wang Yuqiang was only responsible for the public relations business of cloud music.

From a business perspective, although cloud music still has the problem of revenue growth, on the whole, its financial situation has improved significantly. In 2022, NetEase Cloud Music achieved a gross profit of 1.29 billion yuan, which is 9 times that of 143 million yuan in the same period of 2021, and its annual gross profit margin also increased from 2% to 14.4%. At the same time, Cloud Music's adjusted net loss for the whole year of 2022 decreased from 1.04 billion yuan in 2021 to 110 million yuan, and the annual operating cash flow turned positive in 2022.

The switch from loss to profit will be a significant development node for this online music platform, but it is not necessarily the direct impact of the handover of Zhu Yiwen and Zhang Dong, after all, the actual helm of this company has never been out of Ding Lei's hands.