If you search “music public performance” on Baidu News, you will find most of the results are related to one name —— LavaRadio. Though people may not be familiar with this company, it has become the largest environmental music radio station in China. Chen Xi, the founder of LavaRadio, worked for Yahoo and Alibaba. She has fallen in love music since she was a child. The company was founded in 2010 and once hosted a music festival. It was after the idea of “music + Internet” formed that LavaRadio came into being.
LavaRadio was launched in July, 2013. Zhang Youdai, one of the most famous DJ in China, is the co-founder of the company and responsible for music quality. The team has groped new business model of LavaRadio for two years, which is “software + hardware+ service”.
In the process of upgrading domestic consumption, experience is more important than before. This might be the soil for LavaRadio’s new growth.
What is LavaRadio?
Entering into LavaRadio office, the pleasant background music soon made us relaxing. Chen told CMBN, “Our decoration is designed by the designer of MaanCoffee. From desk to book self, we use the post-modern country style. Our background music is the content from LavaRadio. ”
Opening LavaRadio’s website, there orderly list more than 140 programs, of which the most popular three are Work, Sleeping and Flirting. There are hundreds of short programs under each channel, containing 14 to 15 songs on average. All of those contribute to the public performance contents. The music in the channels is first selected by 37 DJs, music psychoanalysts and hypnotists in six countries, and then overall operated by LavaRadio. The product is aiming at C-end-users of whom the APP downloads reaches more than 10 million. Plus, the number of monthly active users is more than 2 million. Generally, the profits are from membership fees. VIPs can listen to VIP channel and are free from ads.
In terms of public performance, the background music can be customized for different brands of shops besides providing copyrighted background music for malls and customers. Customers also can apply for their special brand program on LavaRadio and post it on the platform on their phones or tablets to create a refined public performance radio station in the market. At present, its partners include Harper’s Bazaar, Kindle, Onkyo,Sonos, Tony Studio, Kama and so on. Therevenues are collected from public performance music for customers and music design service.
Now, LavaRadio has signed partnership with DJs in six countries and also with other related copyright owners, establishing music channel. The whole body is on LavaRadio clouds, transmitted through hardware and software side.
In iOS APP, users have to pay for the music if they download it on their phone offline, because LavaRadio attaches great importance to copyrights. The scope of copyright coverage is very large, including playing music in public environment. Chen said, “Public performance is related to the jurisdiction of the country, we have to be authorized.”
Next step: +Hardware
Not satisfied with the cooperation with intelligent hardware, LavaRaidio is making a smart speaker. In May, Chen started to have the idea of making a speaker. And not they have the prototype of the first generation. The crowdfunding will be initiated on Jingdong.com on September 20th, estimated shipping on October 20th.
Why do you have the idea of doing hardware? Chen explained: “Hardware can give you a more concrete concept. The company should not promote downloads blindly. It should put emphasis on activity and payment rate. In fact, it should think about the payment rate, because we depend on music to earn profits rather than on flow. We now offer you a very good hardware. When you find it is convenient and easy, you’re willing to pay for it. ”
Of course, music content cooperation is not limited on LavaRadio’s own hardware. It also has collaboration with other smart hardware. Currently, LavaRadio has just started a car project for users to link service content though 3G network rather than smart phones. LavaRadio will sell it with flow and 3G packet and customers only have to pay for the service packs.
LavaRadio launched A round financing in December 2014, which is still in the process. Earlier in the beginning of the company in 2013, it received more than 3 million Yuan angel investment from Buttonwood Capital, Gu Hao —- the partner of Huarui Capital and Wang Lijie from PreAngel.
LavaRadio pushes revenue through public performance, satisfies different music fans with subdivision and improves music service through hardware. The “software + hardware + service” mode has come into being. The vertical segments business model helps LavaRadio to win financing in the A round. Chen revealed that the company will gradually shift towards music + hardware to make music productized into all kinds of situations.
Dialogue with Chen: The huge music public performance market worth expectation
CMBN: How do you think of the domestic music public performance market?
Chen: This is a huge market. The number of Internet music users in China is larger than the population of U.S.A. So we must make use of our demographic dividend. The population in China means large number of shops. The store base and market base is enormous and people are trying to improve their living standards. Their consumption awareness is changing. So does the managing awareness. Additionally, the country will take more measures to strengthen intellectual property protection. The whole market, policy and consumption environment is good for the development of music service. Faced with such a large market, we have music of comprehensive copyrights, excellent hardware system and professional service, forming a high barrier to competitors.
In LavaRadio’s opinion, a great proportion of musicians’ income is from public performance. For merchants, music is only a part of management tool. Businessmen have purchasing power, so why not pay for the good works of artists? In the future, LavaRadio may sign independent partnership with artists, and establish public performance rules in China with National Copyright Administration.
CMBN: What’s your next focus?
Chen: Our focus in the next step is software optimization and hardware promotion. We want more people to know this is a brand new business model of music. Though we sell hardware, what our customer pay for is service. We also plan to cooperate with household appliances. Now the program is under testing and it will be launched soon. What LavaRadio explains is the relationship between human and music. No matter what the carrier is, users finally enjoy music and making hardware is also for their convenience. If our service has excellent user experience, customers will be happier when it is combined with music.
CMBN: What’s your plan for LavaRadio?
Chen: In fact, we sincerely hope that all musicians can get the rewards they deserve, for it’s a must if we want better music. We hope that our business model can help them get more rewards. As for the company, we hope that all stores can join in LavaRadio. Honestly speaking, LavaRadio is the largest environment radio station in China. We want to do better than Pandora.
PostScript: pioneering “iron lady” Chen Xi
Chen Xi is workaholic who leaves the company until 22:00 and feels quite normal sleeping at 2:00 or 3:00 a.m. In order to save the time on commuting, she rents an apartment near her company. She does not like to dress like other office ladies. Instead, Chen wears man’s shirt, jeans and high heels. This is Chen style. It is said that she even wear these to the party. Clearly, Chen does not care about feminine.
Except appearance, Chen has some boyish hobbies. For example, she likes to wear mechanical watch on her left wrist and carry ESSE cigarette wherever she goes. She also plays Lego. When Chen talked about Lava Speaker, she showed us the semi-finished product photo on her phone. She likes hardware and dismounting, even disassembling a speaker to see the inner structure.
Chen feels ok with people’s calling her “iron lady”. But she was frustrated about women entrepreneurs, “I think it has nothing to do with gender. There’s no difference between women and men in entrepreneurship. I never received any special care because of my gender. If there must be a difference, that it women can withstand more pressure. ”
Due to her work, Chen is still single now. “I get off work very late and soon go to bed when arriving home.” Because of her work, Chen broke up with two boyfriends, of which the later sent her a last message: “Chen, can you sent me a message that is more than two words?”. Chen is also very frustrated because the company is not stable now and she is not ready to have a relationship.
But when the company is not busy, she flies to Copenhagen every July and stays for half a month to go to the Roskilde Festival and Copenhagen Jazz Festival. She listened to many works of street singers there, remembering her that many works of musicians and artists could not be heard by fans. She hopes to bring such good music to China, which is also the reason for her to choose music public performance as the main business.
(Translator: Ellie; Editor: Chuqian Li)
Copyright © 2015 China Music Business News