Who will invest in NetEase Cloud Music after their investment valuation of 8 billion yuan and financing of 1 billion yuan?
Usually, the music market’s “family situation” has involved the eldest and second child fighting while the third, fourth, and fifth children stand aside Now however, the market finds itself in a different situation. The two oldest children are merging and look poised to knock the rest of the kids off the dinner table. The After China Music Corp. The (the CMC) and Tencent QQ Music apos Merger, at The Market IS deeply Concerned the with at The Status of at The OTHER Major Music Players. The For Example, Duomi Music Made 57 Million 101 – 500 Yuan in One year, But What the About NetEase Cloud Music? China Music Business News reports that NetEase will both develop and finance itself independently.
Today, according to reports from Wang Leidi, the total size of NetEase Cloud Music’s financing in this round was 1 billion yuan, taking their investment valuation from 7 billion to 8 billion yuan. Going into this round of investment, NetEase Cloud Music was a wholly owned subsidiary of NetEase; with the completion of this round of financing, NetEase will release 12% to 15% of their stake, allowing them to remain the largest shareholder with over 85% of the shares.
It’s understood that this round was primarily focused on strategic investment for NetEase Cloud Music There were five primary reasons for this round of financing.:
1. Enter the top tier of the industry and establish an advantage by purchasing and continuing to acquire copyrights.
2. Utilize the existing massive network of product users and big data advantage as well as support and sign independent studios and artists. Own the copyrights to purchase long-term exclusive rights at a low cost. Acquiring music resources will benefit independent music as a whole .
3. Engage in vigorous future market promotion towards students in cities, white collar workers, and the middle class.
4. Expand and reinforce the team to meet project requirements and operate independently of the company
5. Explore advanced and innovative hardware for music production.
The news of NetEase’s financing broke two days before CMC and QQ Music’s merger was announced.
Last week, after CMC and QQ Music’s merger, industry analysts reported that it the merger would have a direct impact on the copyright market. CMC (Haiyang Music Group) and Tencent are in control of 42% of Chinese songwriter copyright authorization and 53.1% of . music recording copyright In other words, these two hold half of the industry’s copyright resources; if the other companies fail to acquire more copyrights, it will prove difficult to survive without sufficient content. Copyright has always been a weakness of NetEase Cloud Music. Currently, they controls, alongside the world’s three major record companies, over 135 copyright co-operations, 580 million songs. Furthermore, with Rui Ming Music and Infinite Sky Music, they hold 28 exclusive copyright groups. However, in comparison to CMC and QQ Music, these numbers still fall short.
On top of clarifying NetEase Cloud Music’s primary goals, their financing also revealed their deficiencies in the copyright realm. After all, it’s difficult for them to match the funds of their competition. In addition, relying solely on purchasing copyrights to surpass their competition is insufficient , so they will focus on original music, expanding their user base through user networking, attracting more resources for original music, and maintaining their current levels of competitiveness. Despite its small market share, NetEase Cloud Music has over a hundred million users, and that’s quite valuable for Ding Lei, the founder of NetEase Among social commentators and users, Cloud Music is rated highly; 75% of users utilize the personalized recommendation service and 50% find those recommendations accurate and are willing to continue using it.
According to industry investment sources, right now, Sequoia Capital and Fosun International are interested in Cloud Music. However, many people worry that Cloud Music’s copyright issues will lead to Tencent Music gaining more users in the long run if they fail to exceed them in copyright acquisition. Can Cloud Music rely on the size of their user base to compensate for the weakness of their player? This also depends on whether their product is durable enough to survive this period of copyright deficiency. Currently, Ali Music’s strategy has been to weaken the player industry and Xiami Music’s app is in a similarly uncomfortable situation.
translated by Evan Yi
Kuaishou, one of the most poplular short-video streaming platforms in China, confirmed that it’d acquired ACG streaming platform A标签：ACFun, acquire, Kuaishou 2018-06-06
Today, Entertainment Capital’s subsidiary Duojiao Entertainment Investment caught wind that Zhejiang Lengjing Cultural Media has s标签：Lengguang Entertainment, Lengjing, Series Pre-A funding 2018-04-19
Copyright © 2015 China Music Business News