When it comes to the "small but beautiful" tracks in the domestic Internet industry, podcasts will undoubtedly be on the list, but a few days ago, another Internet manufacturer started a podcast business. Recently, NetEase Cloud Music's first podcast conference was held in Beijing, with the theme of "amplifying the volume", and the official also released the "seeding plan", which aims to comprehensively support the growth and development of podcast creators and make sound creation a sustainable career choice.
It is reported that the "Seeding Plan" has formulated corresponding support measures for creators at different stages of development, including providing traffic support, content guidance and payment function opening for newcomers; middle-waist anchors can enjoy tens of millions of cash incentives, 100 million-level traffic support, advertising resources, etc.; and head anchors will receive 1V1 exclusive services such as IP construction and business empowerment. In addition, NetEase Cloud Music said that the plan is also the first project in the industry for video creators to transform into podcasts, which is the "500 Video Anchor Ecological Support Plan", which is expected to introduce at least 500 video creators to join the podcast track in 2024.
As a music streaming platform with 200 million monthly active users, NetEase Cloud Music's expansion into the podcast field is actually a concrete manifestation of business diversification. Don't look at NetEase Cloud Music, which just handed over a beautiful 2023 annual report at the end of February, showing that its net income for the year was 7.87 billion yuan and net profit reached 734 million, achieving an annual turnaround for the first time, but their social entertainment services decreased by 33.6% year-on-year to 3.516 billion yuan.
In the eyes of many industry insiders, the efforts of short video platforms such as Douyin and Kuaishou in karaoke and live broadcast may be one of the core factors for the decline of NetEase's cloud music social entertainment business. Another hidden concern is that with the "5 yuan student membership", the opening of Taobao 88VIP to give away a one-year NetEase cloud vinyl membership, incentive advertising, and a lower payment level than its competitor Tencent Music, NetEase Cloud Music has gained 44.12 million monthly paying users, and the payment penetration rate has reached 21.4%, which is currently the highest level in the field of domestic music streaming. In the state of paying penetration rate to a new level, it is obviously unrealistic to expect the scale of paying users to continue to grow rapidly.
In this way, podcasts have entered the field of vision of NetEase Cloud Music. Although compared to overseas markets, podcasts can only be said to be a new thing in China, until the first year of domestic podcasts in 2014. With the rise of Himalaya and Litchi FM, more and more people have begun to like this form of content.
According to JustPod's "2022 Chinese Podcast New Observation" released at the beginning of last year, as of August 2022, the number of Chinese podcasts has exceeded 25,000, an increase of more than 150% in three years. eMarketer, a market research organization, predicts that the consumption scale of podcasts in the Chinese market will maintain an average annual growth momentum of 15.8% from 2023 to 2024.
In the past, the reason why podcasts were not popular was actually very simple, because there was no complete radio era in China, and many young people did not have the tradition of listening to radio programs. Therefore, when such users have content consumption needs, in the Internet era, they will naturally resort to more familiar forms of content, such as newspapers for WeChat public accounts and TV for online videos. What's more deadly is that the audio is equivalent to video without a picture, and the user's efficiency in obtaining information is even lower than that of video. Compared with traditional graphics and texts, the information density of audio is too low, and the expressiveness of audio is too weak compared to short videos and audio.
In fact, podcasts also have an advantage that short videos don't have, that is, they can consume content without visual sights. For example, when doing housework, outdoor sports, and driving, the user's eyes need to do other work at this time, and they must not be used to ingest other information, and hearing has become the second best choice at this time. If housework and sports aren't typical, commuting is definitely the key to the rise of podcasts.
With the continuous improvement of the level of urbanization in China, more and more young people are also entering the city, and commuting has become a part of the time that many people need to take. An hour's commute in a big city, combined with the overcrowding of public transport, and podcasts with headphones on but without having to take out their phones, are all part of their own.
The data in "2022 Chinese Podcast New Observation" also confirms that podcasts are more popular with urban youth. Among them, the undergraduate rate of the podcast audience reached 50.5%, and the average age was 30.2 years old, of which 73.9% were core users aged 22-35, 48.5% were from first-tier cities, and 25.1% were from new first-tier cities.
Young, knowledgeable, and spending, these are the labels of today's podcast users, and for Internet companies, this type of user is almost the most valuable. At the same time, most of the use scenarios of podcasts will be that users are isolated from the outside world, so it is easier to generate a sense of intimacy, which means that users have a high loyalty to the content and services of the platform. Users who are not short of spending power and have loyalty are too much potential to be tapped.
Taking Himalaya as an example, the company's top management claimed in an interview in October last year that "I believe that podcasts will become the No. 1 track in Himalaya in three years." Behind this statement, Himalaya's podcast business not only does paid content, but even engages in podcast sales. Therefore, for NetEase Cloud Music, which has a unique community ecology, cultivating a podcast business will obviously be able to bring it greater imagination.