Shulou(Shulou.com)11/24 Report--

In 2005, the Spring Festival Gala of the year of the Rooster in the Lunar New year, a song "Mouse loves Rice" became an iconic node in the online music industry. With this song, Yang Chengang appeared on the CCTV stage with idols such as Jolin Tsai and Shuimu Nianhua, becoming the first online celebrity singer at the Spring Festival Gala, which also marks the gradual tilt of China's music promotion system from traditional record companies to network operators.

Time goes back, from the nine days music network established with Napster in the same year, Chinese online music has gone through 23 years of ups and downs. During this period, the flow of online music was the king, flooding, there was rampant piracy, the "five dynasties and Ten Kingdoms" period, but also after the copyright war, the competition for the Central Plains formed a "one super and many strong" pattern.

Today's online music industry has come to the deep water of development: on the one hand, the major music platforms are shackled by the content forms of copyright and music, and each other is trying to live like each other; on the other hand, with the exhaustion of user dividends and the overflow of entertainment content, coupled with the attack of short videos, the industry seems to have taken a "space step" (seemingly forward, but actually backward).

In this article, "New position" will try to take traffic, copyright and business model as the logic, stand at the current time node, review the prime time and history of the online music industry, and focus on the analysis of the existing TME (Tencent Music) and NetEase Cloud, in order to explain the existence and logic of the phenomenon of "space walk", and record the far-reaching impact of music on Internet technology and space.

Traffic flow is attributed to Guangzhou, Shanghai, Beijing, three cities, three worlds, three kinds of life.

In 2000, Guangzhou, a person, a server, the search music network was born. As one of the first people to come into contact with the Internet, Xie Zhenyu is undoubtedly lucky. Like NetEase's Ding Lei, unwilling to be lonely, regardless of the opposition of his family, he resolutely smashed the iron rice bowl of China Merchants Bank and joined the wave of Internet entrepreneurship.

This year, Robin Li, who invested with a US dollar fund, returned home to set up Baidu; NetEase, who will be two-thirds of the online music world with Tencent, has just rung the Nasdaq; and Ma Huateng is peddling QQ at four places at a price of 1 million in order to survive the millennium Internet bubble crisis. The first phase of the online music industry, which began with Baidu and attributed to Tencent, seems to have changed dynasties, but in fact it all revolves around the core of traffic.

As the earliest professional music search engine in China, search Music has been a great success as soon as it came out. Search for the rise, Baidu coveted, to attract it to the account, but because the rock bottom price and Xie Zhenyu heart price is very different, the two finally passed by, onto the ring.

In 2002, in Shanghai, engineer Zheng Nanling released a software called "MP3 Walkman" in his spare time for Winamp. Then, out of his love for "Qianqianque Song", he changed the software to Qianqian listening. As a software that combines the advantages of playing, transcoding, lyrics, Chinese and free, thousands of listening has firmly grasped the hearts of users and opened a new era of online music in China.

At about the same time, the acquisition of failed Baidu, launched the MP3 business, through computer search can be online audition and free download songs. During the PC period, the search engine was the marsh country flooded with water. Relying on the huge flow advantage, Baidu MP3 was a reduced-dimensional blow to the search network. Xie Zhenyu, who did not give up, focused on the downstream market of music search: music download and music client market.

In 2004, Xie Zhenyu re-launched, focusing on P2P sharing and inheriting the mantle of the search network, KuGou Music was founded, and it was this transformation that made KuGou a dark horse in the online music industry.

Different from Xie Zhenyu's high-spirited spirit, Zheng Nanling's experience was slightly sad. In 2006, competition in the industry intensified, cash flow difficulties and thousands of people who failed in their own transformation were forced to sell their bodies to Baidu. Baidu, which was deeply in the plight of piracy, was not easy to solve for a long time, and completely lost the opportunity to compete in the online music industry. In June 2018, Baidu Music announced that it had changed its name to Qianqian Music before returning to public vision. However, this jianghu has already changed its owner.

Zheng Nanling, after the end of the three-year agreement period, waved his sleeve and quickly left Baidu, leaving only the legend of "Nanling warrior". And also entangled with Baidu, there are known as "Baidu seven swordsmen" technology Daniel, thunder.

In August 2005, in Beijing, Lei Ming and his old classmate Waiqi co-founded Cool me Music. In the same month, Baidu, its former employer, rang the bell on NASDAQ and soared 354% on its first day of listing, creating a miracle for Chinese stocks, while Lei Ming, who had just left Baidu the year before, would obviously have nothing to do with honor.

Thunder, who comes from a technical background, gives full play to his advantages. Kuwi music is not only user-friendly, but also can automatically identify songs by simply humming, thanks to this, just a few years after being online, Kuwo music easily won 300 million users.

However, because of the high cost of copyright and the difficulty of making a profit, Kuwi Music was sold to the copyright company Ocean Music for less than $100 million at the end of 2013. A year later, under the control of Dhanin Chearavanont, the founder of Ocean Music, the merger of Ocean Music, KuGou Music and Kuwo Music was completed, and the China Music Group came into being. When Lei Ming was about to be out, he sighed helplessly: "now music has completely become an ecological game of copyright, and as an engineer, I decided to gradually withdraw from management."

In 2016, Tencent and China Music Group reached a partnership to form the Tencent Music Entertainment Group Group (TME), and Tencent took a controlling stake.

When the feast of the "double 12" Shopping Festival in 2018 was not over, Zhou Hongyi, the "master in red" who had been silent for a long time that night, posted a circle of friends: congratulations on the successful listing of Tencent Music, congratulations to KuGou Xie Zhenyu, Cool Thunder, Ocean Music Dhanin Chearavanont, congratulations to Tencent Ma Huateng, who is also a shareholder of Tencent Music, and I am an early investor of KuGou. "3Q War" seems to be a thing of the past, and years are quiet in simple words.

The experience of "a body of literature and martial arts, goods and BAT" and "two cool" is a true portrayal of the relationship between small and medium-sized enterprises and giants under the background of the times. Also on this path is Xiami Music. In 2013, Xiami Music, which had not found a suitable profit model and way to cash in, was forced to sell itself to its old employer, Alibaba.

However, whether it is Baidu in the PC era or Tencent in the mobile Internet era, the throne of the online music industry has always been a major user of traffic, and Alibaba has always been the spokesman of "lack of traffic". How can this torch not be handed over to him? On January 5, 2021, Xiami Music issued an announcement announcing the official closure. At the end of the same year, NetEase Yun Music was listed on the Hong Kong Stock Exchange.

For Xiami's exit, Wang Hao, who has been transferred to another job, seems to be very open, only in Weibo replied: "No, there is no Bai." Whether it is really put down, or the helpless self-mockery of that era, Xiami made a footnote to the end of the era of crazy gold panning that once belonged to the opportunity of online music in China. In the future of the industry, it will be a Tale of two cities belonging to Tencent and NetEase.

02, the separation of music from music "this is the best of times, but also the worst of times. People are on the road to heaven, people are going to the gates of hell." -- Dickens

In 2005, it can be said that it was a watershed for China's online music industry. Tencent established a digital music department and officially launched QQ Music. On August 15 of the same year, NetEase announced that he would stop his MP3 search business and temporarily leave the music industry. Ding Lei did not return to the poker table with NetEYun music until 8 years later.

This year, music copyright problems began to emerge, record companies jointly put pressure on the music platform, Baidu first lost to Shanghai Buisheng, and then to Global, Warner, EMI and other seven companies, in order to avoid the impact on the listing plan, Baidu took the initiative to lower its profile when negotiating with record companies, gradually weakening the role played by MP3 business in income and traffic.

Chen Pei, president of ZhongSou, who had been "contemptuous" of Baidu before, stepped forward, attacking record companies for "focusing on their own interests at the expense of industrial development" and "will make China's Internet face a big retrogression." At the time of the cross-flow of the sea, Chen Pei showed his heroic character, but Chen Pei's voice was somewhat elegant, but in fact it was only a matter of interest.

For ZhongSou, the traffic of MP3 search accounted for more than 10% at that time, and Huicong International just reduced its stake on a large scale, so turning off MP3 search is undoubtedly an act of self-harm. Although it is more selfish to speak for the arch-enemy, it cannot be denied that Internet companies chose to be collectively silent and sit on the sidelines, laying the groundwork for the weak position in the future copyright war.

Taking Baidu as an example, Tencent only takes advantage of traffic and does not suffer from copyright losses. Before NetEase Yun's return, Tencent was the only overlord in the online music industry, wantonly enclosing the rights of record companies and forming a "copyright alliance", laying the groundwork for having "the only say" in the copyright war in the future.

In 2015, in the face of rampant piracy of online music in China, the National copyright Administration issued the strictest copyright order in history, requiring online music platforms to stop spreading unauthorized music works. Copyright has become the killer mace of the platform, and it is during this period that Xiami music and beautiful music every day gradually fell behind due to the lack of copyright, and finally disappeared in the long river of the industry.

Tencent acquired the rights to 20 million songs previously bought by Dhanin Chearavanont through a merger with China Music Group in 2016. In 2017, Tencent Music won the exclusive rights of the three major record companies: universal, Warner and Sony. At this point, Tencent Music Entertainment Group Group (TME) has become a well-deserved oligopoly in China's online music industry.

"I have been in this industry for eight years, and my original intention is to keep the industry up to date, but now the current situation of the industry is absurd," Wang Hao said when he left Xiami in 2016. With the lag of Ali and Baidu, the competition pattern of "one super and one strong" in China's online music industry, Tencent Music and NetEyun Music has basically taken shape.

But NetEyun is only under the suppression of the traffic giants, by virtue of supporting minority musicians, recommending song lists, and community music reviews, these means of returning to music itself have temporarily broken the shackles of traffic and broke through the tight encirclement; and in the copyright war, NetEase Yun is always faced with a mountain that can only be "unarmed" to go on the battlefield, and the missed eight years can never be found again.

The good news is that the copyright issue has been hit hard twice in a row since 2017. In 2017, the National copyright Administration explicitly required that "music companies and online music platforms should fully license online music works and avoid exclusive licensing", and "only 1% of the exclusive copyright is allowed." by 2021, it has issued a "decision on administrative penalty" directly to Tencent Music, ordering it to remove the exclusive copyright within 30 days.

Does the cancellation of exclusive copyright really have the effect of subverting the rules of the game in the industry? Maybe, but it's not that big. The cancellation of exclusive copyright does not mean that the cost of copyright will be reduced. There is more room for discussion on how to price, how to authorize and how to trade. In the seller's market of copyright, all the rules of the game are still made by the upstream of copyright.

Whether it is the copyright pricing of a single piece of music, or the collective procurement cost after expanding the number of tracks, will eventually be reflected in the operating costs of the enterprise, and ultimately need to be paid by consumers. Under the background of the lack of commercialization path, the copyright procurement of online music platform is still lagging behind, and NetEase Yun has always been unable to go online "Jay Chou".

With the copyright war, the competition between online music platforms has gradually separated from music. One wave after another, copyright has not been sorted out, and the dimensionality reduction of short videos has come.

From the perspective of the role of the product, the major music platforms are obviously hit by short videos. "in the short term, we can see that short videos and live videos will distract users for some time and distract their attention," Ding Lei explicitly admitted in a conference call in November last year.

According to the 2021 China Mobile Internet Annual report released by QuestMobile, the total number of hours used in short videos has exceeded that of instant messaging at the end of last year, becoming the area that takes up the longest time on the Internet. In January 2022, the average daily use time of all mobile music users was only 21 minutes, down 21% from the same period last year.

Obviously, in the content of short video form, hearing or music can only gradually become a visual vassal, and short video greatly dilutes the value of music itself. 15 seconds is the mainstream melody of short videos. Songs that have only heard the best parts but have never heard the whole song "Hot Song" have been brainwashed in turn, and musicians have no intention to create them.

Whether it is Byte's newly launched "soda music" or Kuaishou's main push "Komori singing", they are all trying to intercept users who turn to the music platform to listen to a complete hot song, forming a closed loop of traffic. the plan for players in the short video industry to get a piece of the pie from the online music industry is self-evident.

More importantly, short videos will not only compete with the online music industry for the growth of users, but also compete with them for copyright. According to the Wall Street Journal, TikTok is competing for copyright with the entire music industry, and Byte is in talks with record labels to expand its global music streaming service, hoping that the service will eventually be integrated into TikTok as the main platform for distributing music around the world.

At the same time, Kuaishou has also stepped in again this year after reaching a global licensing agreement with Warner Group in August last year, signing agreements with Believe (digital music distribution platform), February and AMRA (copyright collection platform), October and Merlin (independent recording rights organization) respectively.

With the addition of the short video platform, the copyright war in the online music industry has intensified, and every practitioner may be able to realize that the online music industry is breaking away from music itself.

03. Walk the Space Walk Daniel Ek, founder of Spotify, hangs a famous saying in the office of the poet George Bernard Shaw: "rational people let themselves adapt to the world, irrational people insist on letting the world adapt to themselves, so all progress depends on irrational people."

In 1999, Sean Fanning, an 18-year-old freshman at Boston University in the United States, wrote a P2P-based Mini Program "Napster" to help roommates crawl MP3 files on the Internet for free. At that time, the Internet was underdeveloped, and "Napster" had 80 million registered users at its peak.

However, "Napster", which has been besieged and suppressed jointly by major music copyright vendors, has only existed for three years from its appearance to its demise, but it has fully confirmed the feasibility of P2P technology in the wide area network. "Napster" has also become synonymous with the trend of free knowledge sharing. This catfish, which disturbs the spring water of the world music industry, has been reborn and grown in every corner of the world network in a different form.

The charm of music lies not only in the senses, but also in the joy, anger, sadness and joy of human beings, but now people are more accustomed to obtaining the power of these emotions from video; music was once the key for the Internet to create new technologies and explore new models. with the development of the Internet, from player tools to content platforms.

But now, the online music industry seems to be in reverse, it is difficult to make a breakthrough in business, and the model has once again become a tool. First of all, from the financial data, Tencent music users continue to decline and profits continue to narrow, while NetEase Yun has not been able to climb out of the quagmire of losses:

In Q2 in 2022, Tencent Music's online music revenue fell 2.4% from a year earlier, while social entertainment and other services, which account for the bulk of revenue (58.3%), fell 20.4% from a year earlier. The mobile MAU of social entertainment services has fallen 9 times in a row compared with the same period last year, and the number of quarterly paying users has dropped from 12.8 million in Q1 in 2020 to 7.9 million today.

NetEyun is still not out of the quagmire of losses, even though the Q2 financial report shows that its loss narrowed by 59.3% compared with the same period last year, it is still as much as 217 million yuan. However, this is not an isolated phenomenon, international music giant Spotify Q2 this year a net loss of 125 million euros.

The online music industry is in desperate need of new stories.

In the past, Tencent Music first summed up the five-word policy of "listen, sing, watch, play and buy", and then deleted "buy". Now live music is moving under the attack of short videos, and concerts have also been hit in the context of the epidemic. The five-word policy can only reflect "listen" and "sing" in the financial report. The growth of C-end users is weak and it is difficult to cash out, and the online music industry has even set its mind on the B-end market in cars.

The outpost of TME is Kuwo Music, which is the first product in China to support in-car Internet music. It launched an in-car application in 2012 and won the favor of many car companies on the B side with its first-mover advantage. Data show that through cooperation with more than 60 mainstream car companies, Kuwi's market share has exceeded 80%. It can be said that Tencent Music's road to getting on the bus is smooth.

Last month, Xiaopeng G9 was released, in which the "music cockpit" was quite eye-catching. in the past, most of the cooperation between music broadcasting and car companies was simply providing copyright "content to get on the car." but this time, in addition to content, it is clear that NetEase is trying to turn "car" into a new social media.

But no matter how well the gimmicks are made, how to make a profit is always the core issue.

On the one hand, in terms of user distribution, the number of cars in the country in the first half of this year was 310 million, and the number of new energy vehicles reached 10.01 million, while the monthly active users of online music in China were more than 600 million, of which the degree of overlap was high. On the other hand, from the profit model, car music is also very difficult to "secondary charge" for users.

For platforms that have already opened up vehicles and mobile devices, such as QQ Music, the original paying users do not need to pay twice; but if you refer to Youaiteng's mobile and TV dual-end membership model, it is even more unrealistic to require users to open membership twice. Take TME as an example, the proportion of users opening members is only about 10%, and users who are willing to open members twice may at least get a 50% discount.

Obviously, whether it is concert, live broadcast, or car music, the online music industry has not yet found an effective new path. From the era of traffic to the era of copyright, and then to the era of short videos, the online music industry is once again becoming the backdrop of the Internet, perhaps as a player like their predecessors.

04. Write at the end, "even though thousands of songs will float in the distance, I will be on my way." In the memories of the post-80s and 90s, Qianque song is the white moonlight in the heart, and thousands of listening is the mark of the youth. In the tone of singing politely, the shallow sighs of the pioneers and losers of the online music industry such as Zheng Nanling and Wang Hao are recorded.

Whether it's from gramophones to CDs and tapes, or from TV, MP3 to music App, or from the non-mainstream culture represented by Xu Liang, Xu Song, Wang Su Taki and other QQ Music giants to the brainwashed "Divine Comedy", the way, channels, and styles of people listening to music may be changing all the time, but as a medium between video and text, the meaning of the times carried by music itself will never change.

"the Duke of Zhou was afraid of gossip day, and Wang Mang was humble and courteous before usurping it. To make his body die in the first place, who knows if his life is true or false?"

Music may grow old, but it will never die. As for the key point of mutual attack between short videos and online music, on which platform will listeners listen to music in the future? Who will be replaced and who will be integrated between music software and short video software? There is only waiting time to give the answer.

* the problem pictures and the pictures in the article come from the network.

This article comes from the official account of Wechat: new position NewPosition (ID:xinlichangNP), author: VV, Editor: Li Fan

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