What does the $600 million financing bring to NetEase cloud music?

What does the $600 million financing bring to NetEase cloud music?

Source: Beijing business daily

Beijing Business Daily News (reporter Lu Yang intern reporter Mu Mu) on November 13, China Everbright Holdings Co., Ltd. (hereinafter referred to as "Everbright Holdings") officially announced that its new economic fund has completed its investment in NetEasy Cloud Music. It is reported that this round of investors, including Baidu, Everbright Holdings'New Economic Fund, Pan-Atlantic and Boyu Capital, totaled 600 million US dollars. At the same time, this is another important round of financing that Netease Yunyun Music got every other year.

It is reported that after financing, NetEase still enjoys the control of NetEase cloud music alone. As soon as the news came out, the head of NetEase Music said to the relevant media, "The new round of financing is mainly for the introduction of long-term partners with high quality and advantageous resources. It will be mainly used for the support of original musicians and the establishment of upstream and downstream solutions for music. We will work together with partners to build music ecological chain and value chain for users. It brings more high-quality and rich music service experience.

In response to this round of investment, Everbright Holdings said that with the improvement of copyright protection policy, the awakening of public awareness of intellectual property rights, and the change of music consumption habits of the younger generation, China's online music market has broad prospects.

The number of users of NetEase Music has been growing steadily since its establishment in April 2013. In July 2015, the number of users of NetEase Music exceeded 100 million, but by April 2017, when the A round financing of 750 million yuan was completed, the number of users of NetEase Music had grown to 300 million. Comparing with July 2016 when NetEase Music broke through 200 million users, it took only 9 months to achieve 100 million users growth, which also made NetEase Music the fastest growing streaming media platform in the industry.

Industry insiders pointed out that the biggest advantage of NetEase Yun Music is that its precise recommendation function aims at the habits of young consumers. At the same time, NetEase Yun Music emphasizes the social attributes of online music platform, which once again fits the lifestyle of young people and attracts users in a differentiated way.

But Ding Lei, CEO of Netease, revealed in a conference call on first quarter earnings in 2018 that "at present Netease needs to pay a very high deposit to record companies, which has a great impact on us. In fact, these high deposits have caused losses to us."

According to Liu Deliang, founder of New Yuan Wenzhi, although Netease, Tencent and Ali have formed music copyright sharing under the guidance of the State Copyright Administration, the sharing of copyright does not mean all, but some of the high-quality resources are still in Tencent's hands. So Netease Yun Music hopes to gain more original music copyright by supporting artists, expand original music library in an incremental state, and attract users to develop their competitive advantages by using exclusive content.

"Generally speaking, the mainstream of music consumption still exists in young users, which has become a valuable resource for major platforms. With the gradual diversification of domestic music, electronic, hip-hop and rock music forms have been sought after by everyone, the future online music platform must compete for a position. In the field of user payment, this requires that the platform has a large number of high-quality content as support, whether the existing high-quality content or the created high-quality content may attract more users. Liu Deliang said.

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