Shulou(Shulou.com)06/03 Report--

The success of Tencent Music's payment strategy has once again won it a full house.

According to the Q4 financial report released by Tencent Music on March 16, the number of people paying for online music and social entertainment increased by 47.8% and 21.6% respectively from a year earlier, while the per capita paid income for online music (ARPPU) increased by 8.1% year-on-year, while social entertainment increased by 9.3%.

On the one hand, this achievement is due to the technological upgrading of its applications, on the other hand, Tencent Music promotes it through a variety of operational channels, such as social events, live streaming, and original musician support programs. improve brand value and empower your own applications.

Today, Tencent Music has a large number of active users, with an average monthly active number of Q4 online music (MAU) of 644 million respectively, while the MAU of the social entertainment business has also grown by 2.6 per cent compared with the same period last year.

The continued excellent performance of financial data is both driving force and pressure. at present, QQ Music and KuGou music and Kuwi music often occupy the top three in the rankings of online music applications. Tencent Music has a large enough market share. At this point, it needs to find a new growth point.

In fact, in the Q4 financial report, Tencent Music has revealed this information, in 2020, long audio will become a new power point of Tencent Music.

The time is ripe to hold hands with China Literature

Tencent Music pointed out in the financial report that the long audio market is a blue sea, because it not only has a huge market potential, the track is also relatively "empty", which is also an opportunity for it to decide to make efforts.

Just one day after the Q4 financial report was released, Tencent Music officially announced that it would cooperate with China Literature Group, who is also in the department of Tencent, on a series of audiobooks.

With the development of the times, with the rise of mobile terminals, the way of information transmission has become more and more popular. while people are divided by more and more new things, it becomes more and more efficient to obtain information through sound. so that audiobooks have gradually become a common demand.

Tencent Music's "long audio" strategy will start in the form of "audio books". According to the plan, "audio books" will be released globally on the platforms of the two companies. Tencent Music will further "harvest" the domestic and overseas audiobooks market.

Since 2017, the entire online audio market has entered a period of rapid development, and the ecology of the industrial chain has become more perfect. At this time, you can undoubtedly enjoy industry welfare and accelerate your own development.

In the heart of Tencent Music, it is a very confident thing to break into the audio book market, which is inseparable from the excellent performance in 2019.

According to the financial report, the operating profit of Tencent Music increased 1.26 times year-on-year to 4.62 billion yuan in 2019. The net profit belonging to the shareholders of the parent company continued to rise for four quarters, with Q4 reaching 1.042 billion, which gave great confidence to the capital market and shareholders.

In addition, Tencent Music's operating cash flow increased to 2.033 billion in the fourth quarter from 926 million at the beginning of the year, and the stable cash flow provided enough support for the next strategic operation.

The popularity of Tencent Music's platform and relatively stable core user base have played a positive role in the promotion of audiobook projects, coupled with the huge investment system of Tencent Music, which will bring a lot of opportunities for Tencent Music to integrate resources. Tencent Music has obvious advantages in entering the audiobook market.

There is no denying that Tencent Music has a large active user base and has its own traffic, so it will be easy to promote a series of audio books. But from the perspective of market competition, first-mover advantage is also important, because they can cultivate users' habits earlier.

At present, in China, comprehensive platforms and vertical subdivision platforms with audiobooks as the selling point are gradually showing up, while Europe and the United States have entered the era of audio books earlier, and the market pattern has become more distinct. Tencent Music hopes to achieve long audio strategic globalization, and the expansion of the competitive market means it needs to pay more energy.

Ear economy welcomes the Red Sea again

The frequency of the word "ear economy" has increased in recent years.

According to the Analysys Qianfan Index, companies such as Himalaya, Dragonfly FM, lazy people listening to books and litchi occupy the forefront of the domestic market all the year round. These companies have been exploring commercial profit models, and as the market has entered a period of rapid growth in recent years, listing may be their next goal.

In January this year, litchi US shares were successfully listed, and recently, companies such as Himalaya and Dragonfly FM have received a new round of financing.

From the trends of these enterprises, we can see that the industry is now in a state of capital racing, listing and fund-raising is to obtain more markets, copyright expenditure and user growth need capital, and as their financing and listing process continues, the dividends of the market will be further divided.

For Tencent Music, I have just joined the new track, and the competitors are already very skilled, which is bound to aggravate the competitive pressure of Tencent Music.

Litchi, China's first audio listed company, fell below its offering price on the second day of listing, and its net loss widened year-on-year again according to its first listing results in March, and its experience may suggest that although the market is blue, but the "ear economy" is not as easy as people think.

In fact, according to Ai Media's research on the online audio market in November last year, although the penetration rate of audio netizens in China reached 57.0%, the proportion of people who did not pay for audio products and those who did not pay for audio products reached 77.5%, that is to say, the payment driving force of users in the paid market is still insufficient.

Therefore, how to make a profit should be the next biggest challenge for Tencent Music to do online audio.

Ear economy is still king.

At present, there are two ways of thinking about making audiobooks. One is the official works. Compared with print media, audiobooks cost more, including manual recording expenses in the early stage and a series of operating expenses in the later stage. As a result, the stock of existing audiobooks on the market is still not high.

With regard to the threshold of audio book production, there is already a research and development team looking for a solution, that is, to achieve cost reduction through AI voice technology.

It is worth noting that the new technology is not mature enough, the current use of AI technology there are still many technical details remain unsolved, such as how to do more in line with the diversity of human voice and emotion processing, which is still the research topic of many teams.

According to the news released by Titanium Media in October last year, the Microsoft Voice team and the public welfare organization Hong Dandan have made preliminary results in their research on voice output, but they have not yet fully simulated the effect of human expression of semantics.

Therefore, in the following period of time, audio book distribution platforms want to use technical means to achieve significant cost reduction, it is still very difficult.

Due to the threshold of funding for the production of audio books and the cost of time, it is obviously impossible to quickly achieve a wide range of publishing like print media, if we can not quickly attract competitive advantage through stock, then we are bound to choose to highlight "quality" and focus on building or potential IP.

This requires Tencent Music to have a relatively full understanding and insight into the needs of the audience market, while avoiding homogenization with other application platforms. Tencent Music needs to have "personal characteristics".

According to the online Audio Special Research report of China from 2019 to 2020, office workers and post-90s are the main users of online audio, and audiobooks are also concentrated in this group.

These people have a variety of interests and attitudes. On the one hand, they have a growing awareness of paying for knowledge, on the other hand, they also keep up with the trend and embrace change.

Therefore, they are the most valuable users and the most difficult to please.

Another idea is to create a social platform to enrich the content of the platform more quickly by fostering anchors. At present, app, including Himalayas and Litchi, have signed support plans, and this UGC model should be quite familiar to Tencent Music. Of course, this method will also intensify the competition for talent resources in the industry.

The big cake in the audiobook market has gradually attracted attention, and many content companies, such as bilibili and Zhihu, have also begun to lay out, which may intensify the competition about copyright to some extent. According to the 2019-2020 China online Audio Special Research report, users' satisfaction survey on China's online audio platform in 2019 shows that IP protection and infringement reporting have the lowest user satisfaction among the six major options. Only 34.6%.

The Himalayan platform was denounced for putting uncopyrighted books on the shelves in 2018 and was hotly discussed on Weibo. In fact, it is not only this platform that has had such negative news, but piracy and infringement are still one of the hidden dangers hindering the development of the industry, which is also a wake-up call for Tencent Music.

Under the UGC mode, with the expansion of the user base of audiobooks, the dissemination of all kinds of content will become more complex, which means that the self-regulation of audiobooks by Tencent music platform will be strengthened in the future.

(official account of Liu Kuang / tr. by Phil Newell) ID:liukuang110

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