Author: Wang Hai
[In online music sector, from 2018 to 2020 and in the first nine months of 2021, the monthly active users of netease cloud music were 105.1 million, 147.2 million, 180.5 million and 184.2 million, respectively.]
Netease Cloud Music announced on November 23 that the company will issue 16 million ordinary shares in the global public, the sale price range is set at HK $19 to HK $220 per share, intends to raise HK $3.04 billion to HK $3.52 billion, in addition to the overallotment of no more than 15%.
According to the plan, netease Cloud Music will launch its global sale on November 23, announce its final pricing and placement on December 1, and list on the Hong Kong Stock Exchange on December 2 under the stock code 09899.HK. The company has introduced three cornerstone investors: netease, SONY Music Entertainment, Orbis Investment Management Co., LTD., a total subscription of 350 million US dollars (about 2.73 billion Hong Kong dollars) of shares, lockup period of 6 months.
China Business News reporters learned that netease cloud music revenue sources are mainly divided into: online music, social entertainment services and other.
The online music sector has 105.1 million, 147.2 million, 180.5 million and 184.2 million monthly active users from 2018 to 2020 and the first nine months of 2021, respectively.
As active users grew, so did the company's paying users. From 2018 to 2020 and in the first nine months of 2021, monthly paying users of online music are 4.201,100, 8.626,500, 15.961,500 and 27.521,400, accounting for 4%, 5.8%, 8.8% and 14.9% of monthly active users in the period respectively
The reason why users are willing to pay is mainly due to the stickiness formed by the content construction of the platform. Netease Cloud Music focuses on "music social networking", creates playlist mode instead of music library mode, opens music comment area and takes the route of supporting original music. From 2018 to 2020 and in the first nine months of 2021, the online music sector's average monthly revenue per paying user was 8.9 yuan, 9.3 yuan, 8.4 yuan and 6.8 yuan, respectively.
In the first half of 2021, netease cloud Music daily live music users spent an average of 76.9 minutes listening to songs, and UGC playlists totaled 2.8 billion, according to the prospectus. In June 2021, about 27% of monthly users actively created UGC music, and three out of every 10 music plays were recommended by the platform.
Social entertainment services and other sections are mainly audio live broadcast, featuring musicians live broadcast. There were 21.1 million monthly active users in the first nine months of this year. From 2019 to 2020 and in the first nine months of 2021, 91,700, 327,100 and 583,700 monthly paying users respectively; The average monthly income per paying user was 477.6 yuan, 573.8 yuan and 504.1 yuan respectively.
The rapid growth of live streaming services starts from the social features of netease Cloud music. Eight years ago, netease Cloud Music launched the "friends" function on the first day of its launch.
Subsequently, the community of netease Cloud Music was gradually built, and social entertainment services such as live broadcasting and online karaoke were also launched. In recent years, netease Cloud Music has further strengthened its community functions by launching "Cloud Village" and "Attention", two first-level pages that strengthen the connection between people and people in the community and between people and content.
Netease Cloud Music has become the third largest podcasting platform in China. According to PodFest China 2020 Chinese Podcasting Audience and Consumption Survey, the top five listening channels most commonly used by Chinese podcasting listeners are: Apple Podcasts (49.7%), Ximalaya (37.9%), netease Cloud Music (35.0%), wechat public account embedded audio Casts (21.9%) and Pocket Casts (19.5%).
In addition, with the continuous expansion of music video business and long audio business, the company is expected to have some room for growth.
Take short video as an example. As early as 2017, netease Cloud Music launched the short video function and became the first music APP with video function. Later, it was upgraded to Mlog and gradually became an important part of the "Cloud Village" community of netease Cloud Music.
In August 2020, netease Cloud Music officially announced the cooperation with Tiktok, aiming at the content ecological construction of "music + short video". In September this year, netease Cloud Music launched the product function "Vinyl Story", which presents the story behind the song in the form of video on the vinyl playing page, endods music with more visual experience, and further excavates the value of short video for music.
In addition, the company expects costs to be more manageable as rights are opened up and large upfront payments are eliminated.
From 2018 to 2020 and in the first half of 2021, the content service cost of netease Cloud Music is 1.9709 billion yuan, 2.853 billion yuan, 4.7875 billion yuan and 2.7594 billion yuan respectively, accounting for 171.7%, 123.1%, 97.8% and 86.7% of the company's current operating revenue. It shows a decreasing trend year by year. Content service costs mainly include content licensing fees paid to music labels, independent musicians and other copyright partners, and revenue sharing fees paid to live streaming performers and their live streaming associations.
Recently, netease Cloud Music has reached strategic cooperation with Modern Sky, Emperor Entertainment and China Record Group. In July, authorities ordered Tencent and its affiliates to remove exclusive music rights. With the termination of the exclusive copyright mode of the domestic online music industry, modern Sky, Emperor Entertainment, China Record Group and other previously "exclusive" music copyright now began to share, copyright opening to return the market to a reasonable state of competition.
At the digital Music Copyright Development Sub-forum of the International Copyright Expo in October, Ding Lei, CEO of netease, said that the development of China's music industry has entered a new stage, and the theme of the copyright industry has changed from "bigger" to "stronger", from "closed" to "open".