The beginning of the new story
Editor’s note: This article is from WeChat public account “Entertainment Industry” (ID: yulechanye ), the author is in April.
After 11 months, NetEase Cloud Music won a new round of financing.
On September 6, Netease announced that Netease Cloud Music has received a total of 700 million US dollars in B2 round financing from Alibaba and Yunfeng Fund. After the B round of financing to Baidu, Netease cloud music has been favored by another Internet giant.
Like the last time, Netease specifically emphasized that the company still has control over Netease Cloud Music alone after the financing. According to the information obtained by Tiger Sniff, Ali’s share of shares is about 10%. According to this calculation, the valuation of Netease Cloud Music’s financing after the investment is about 7 billion US dollars. Compared with the media report of the B round of financing after the investment of 3.5 billion US dollars in valuation, less than a year, Netease cloud music valuation has doubled.
After the downswing, Netease Cloud Music ushered in a series of good news, the total number of users exceeded 800 million, and launched the “Yuncun”, the music community, and now has enough cash support. Netease cloud music, which was originally subject to the compromise of copyright competitiveness, may have new possibilities.
As for the internet music market, there is probably a lot of excitement.
Merge, sell the opposite side
Before the boots landed, the widely circulated version was the merger of Shrimp Music and Netease Cloud Music. In the report of Tiger Smelling, from the end of 2018 to the first half of 2019, the Ali Entertainment Group has been seeking to remove the shrimp. And Ali, Netease talked about the merger of shrimp and Netease cloud music many times, but NetEase thinks that the value of shrimp is not big, so it is not possible to make it.
According to the data released by QuestMobile in September 2017, the monthly users of Shrimp Music is 22.77 million, while Netease Cloud Music is 116 million, and QQ Music is 353 million.
If placed before, although the fall behind is serious, the copyright of Shrimp Music has certain appeal to Netease Cloud Music.
But in the past two years, as the shrimp music was gradually marginalized by Ali Entertainment, its content investment was not as good as it used to be, so that the copyright in the hands of Huayan Music was snatched by Netease Cloud Music, and the music was sold to Tencent. Plus Internet Yiyun Music and Shrimp Music reached a copyright mutual cooperation last year, the latter will be Rolling Stone, S.M., BMG and other music editions.The right is delegated to the former.
So it seems that Shrimp music on Netease In terms of cloud music, it does not make much sense. If it is merged, it will increase the burden. It would be better to get Ali’s real money.
But in the past two years, Netease Cloud Music has repeatedly reported that it will be sold or abandoned. In the rumors of the previous period, Alibaba also bought Netease Music. The fact is that Ding Lei sold NetEase Koala and left Netease Cloud Music.
Compared to koalas that burn more money, Netease Cloud Music, which has 800 million users, not only plays an important traffic portal, but also carries another listing dream outside of NetEase. Tencent Audio Entertainment, which has taken the lead in the capital market, has provided a reference. Ding Lei is certainly not willing to give up the possible fat of music. Netease Cloud Music has always been working hard to tell a better capital story, from knowledge paying, short video, live broadcast to socializing.
Copyright Variables
Copyright is still a topic that cannot be avoided. As the foundation of the development of Internet music companies, the copyright music library affects the size of users and also affects the business revenue model.
So after Tencent Music grabbed a large amount of copyright, it still introduced Warner China and Sony Music as minority shareholders before the listing, and Yongyuan bound the copyright party to ensure the relative stability of the music library. But this is not a long-term solution. Once the lock-up period is over, the guarantee will not be there.
It is reported that the copyright cooperation between Tencent Music and Universal Music has expired in May this year, and the two have renewed their contracts. And a month ago, Universal Music’s parent company Vivendi disclosed that Tencent Holdings is negotiating with itself about strategic investment in the Universal Music Group. Tencent is likely to buy a 10% stake in Universal Music for 3 billion euros. And within one year, Tencent can choose to acquire 10% of the shares under the same conditions, thereby increasing the shareholding ratio to 20%.
Universal Music Group is the world’s three major records One of the companiesThere are many famous artists such as Taylor Swift. According to media research firm MIDIA, in 2018, Universal Music accounted for 31% of the global recorded music market. If Tencent can be bound by investment, it means that Tencent Music has another chip in the new copyright competition.
But after the expiration of other copyright contracts, NetEase Cloud Music may be able to compete with Tencent Music in another battle. It is reported that in the previous copyright war, Tencent Music did not give the most money, but considering Tencent’s traffic ecology, the record company gave priority to selling the copyright to it. Netease cloud music has the support of Baidu and Ali, and complements the advantages in terms of channels and so on.
2C to the left and 2B to the right
It is not difficult to see from the Tencent Music 2019Q2 financial report that the slowdown in revenue growth is an indisputable fact. According to the Netease 2019Q2 financial report, the number of effective members of Netease Cloud Music increased by 135% year-on-year. Ding Lei said that Netease Cloud Music has confidence and confidence in the profitability of membership, advertising, live broadcast, social and other aspects. However, it is understood that this year Netease Cloud Music will set the KPI for 2019 to 3 billion yuan, mainly in the live broadcast, information flow, membership business, but now the focus has shifted to the live broadcast business with more income.
Although Internet music has a large user scale, based on the immature industry chain, the business model for 2C has already begun to emerge, and it is urgent to seek new breakthroughs. So we saw that each player is accelerating the input of the B side.
In June, some people broke the news that NetEase Cloud Music invested in “Huayin Yuet” and entered the music distribution business, while Tencent Music invested in Douban FM, which incorporated the main digital music copyright commercial distribution and Managed V.Fine. Taihe Music, through its copyright distribution business such as Haidie and Dashi, has at least 8 digits of revenue per year, and has already tasted the sweetness of 2B copyright distribution.
Not too long ago, Taihe Music also launched The DMH digital music distribution platform provides one-stop copyright management distribution services such as “content DIY management, international ISRC coding application, online distribution promotion, royalty income settlement, music data analysis, and paid user operation”.
According to Liu Xin, senior vice president of Taihe Music Group, as of now, DMH platform has 160,000 labels, 1.69 million in-stock albums, 13.45 million songs in the library, total usage exceeded 10 billion.
The new story continues.