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Can Tencent Music go public in the US, can it break the online music industry?

via:博客园     time:2018/7/5 18:31:57     readed:405


Recently, there have been a lot of companies listed on the market, especially some Internet companies in the Mainland, which started the third wave of listing. “Listing” has become the annual keyword of the Internet this year without any surprise.

Recently, it is reported that Tencent Music is also scheduled to submit IPO documents to the SEC on July 6. The IPO's lead underwriters are Goldman Sachs and Morgan Stanley. The conservative pricing range given by investment banks is 29 billion-310. One hundred million U.S. dollars. Tencent Music is listed this time, and the market agrees that it is necessary to target Spotify.

However, relying on Tencent, it seems that there is no shortage of money. What is the significance of IPO at this time?

On the other hand, the status quo that must be faced is that the copyright dispute of online music has never stopped. In March of the previous month, copyright wars were successively staged. Although the surface was shaken at the end, it was actually dark.

Although after several years of copyright competition, business model exploration, and capital wars, the Chinese music industry has initially formed a pattern of oligopoly. In any case, besides Tencent's music seems to be profitable, the high copyright and extremely low payment rate make the whole industry not optimistic.

After the listing, the stronger is stronger or the three legs are standing

Looking back at the total number of online music users in China, from the statistics provided by third parties, in April 2018, the number of active users of online music in China reached 610 million, and the penetration rate reached 55.9%, compared with April 2017. Growth, but the growth rate has slowed down noticeably.

This means that the scale of online music users is becoming saturated, and the market structure behind the big game is inevitably more stable and solid.

Tencent Music: Tencent Music includes QQ music, cool dog music, cool music, national K songs, cool dog live broadcasts and other products, forming an ecological product matrix, and opened up all the way to “listen, watch, sing, play” Music experience.

Netease cloud musicAccording to relevant third-party data, according to the statistics of the number of active users of mobile phone music client in China in 2018, the Netease cloud music, which is good at marketing and content community construction, tries to integrate online music and life scenes, but from the data point of view The increase in community viscosity has been fruitful, with a MAU of only 92 million people.


Xiami Music: The shrimp music that Ali acquired and strongly intervened in operation continued to be sluggish. The 30 million active users only had a fraction of the second cool dog music. There was already a later Mi Mi music and Baidu music (now renamed as Qian Qian Music). The trend of catching up. Whether in the music community or in music content, Shrimp music seems to have found no direction.

Baidu musicOn June 19th, Taihe Music Group announced that its Baidu music will be renamed to “Thousands of Musics” and it seems to be interested in returning to the “Big Thousand Listening” era, as the Baidu music at the end of the rankings. From the data point of view, and shrimp, rice music have the opportunity to compete for market share.

In the PC era, Baidu Music is a mobile portal. It has occupied 90% of the market with the advantage of search engine portal. Once brilliant, thousands of listeners. The reason why the name changed to Baidu music later was that Baidu music had no copyright, and it was forced to merge with Taihe Music. Copyright can be said that Baidu Music wants to return to the peak of the first problem to be solved, and now it is still beyond this hurdle after changing its name to thousands of music.

For the upcoming Tencent music, its biggest competitor in China is Netease Cloud Music.

In the face of Tencent Music's unique situation, the competition in the field of online music is not just a copyright dispute. For the distribution of online music by Internet companies such as Tencent, Baidu, Ali, and NetEase, the competition between them has evolved into online. The whole industry chain layout of online music, online karaoke, offline performances and digital albums.

After experiencing the copyright dispute of music in March this year,The continuous integration of internal resources will be the top priority of the current online music platforms.

Although in the early days, Tencent Music and Netease Cloud Music all indicated that there is a possibility of splitting the listing. If Tencent Music splits this time, then for Netease Cloud Music, which has no IPO news yet, there will be opportunities and cool dogs, cool me. Music forms a three-legged situation.

If Tencent Music is packaged and listed, a big situation will be even bigger. In particular, Tencent’s music itself is not short of money. After the listing, it will increase the monopoly of copyright, and for other online music that is backward. It is said that there will be a lot of pressure.

Overall, at present, Tencent’s monopoly situation remains after Tencent’s listing, in order to avoid the trend of strong and strong.

For Netease Cloud Music, the online music competition system that enhances the user's viscosity and total amount in a relatively wide range and establishes a three-dimensional entertainment ecology makes the online music market have a three-legged trend, so that Netease Cloud Music wins more time and Tencent. Music game market share.

Cheng also copyright, defeat and copyright, industry profit dilemma to be solved

The earliest news of Tencent was to be listed in December 2017. According to the news of the company, Tencent Music listed a financing of US$1 billion and a valuation of US$10 billion.

In March 2018, Caijing News wanted Tencent Music to conduct a round of US$1 billion equity transfer, but in this equity transfer, Tencent Music was valued at US$23 billion.

Recently, this round of IPO document investment banks has given a valuation of 30 billion.

The valuation of Tencent Music is higher than that of a wave. Analysis of the reasons may be related to the overall expansion of China's online music market and the influence of Tencent's music itself.

On the one hand, with the increasing emphasis on music copyright by the government and users, music production companies have ushered in new development opportunities.

On the other hand, due to the copyright dispute between online music and the final handshake in March of this year, the online music platform has pushed up the price of music copyright in order to compete for music copyright. This has also put the major music platforms under high pressure on content costs, and to some extent, the overall valuation of the entire industry has been promoted.

Pure copyright vicious competition is not advisable. A large number of music platforms snap up copyright resources, and the last one is still the user. In the environment where Chinese local users are deeply entrenched, the high copyright is not conducive to the online music itself. Industry development.

The author believes that the reason why the online music market will appear in addition to Tencent music, other online music products are losses, chasing the reason, is Tencent Music's strong advantage in music copyright.

Previously, other platforms have questioned that Tencent Music relied on the secondary sale of copyright to make a profit, which directly led to large losses in other platforms besides itself. It is certain that the profitability of the entire industry is not optimistic.

The listing of Tencent Music, how to make the industry achieve a good level of profitability, has become an urgent need for the online music industry to solve.

What is the reference to the Tencent music of Spotify to solve the industry dilemma?

As the domestic online music giant to be listed, Tencent Music is against the overseas giant Spotify. What is the difference between the two?

Spotify is the world's largest online music service provider, and Tencent Music is undoubtedly China's largest music platform. By the first quarter of 2018, Spotify has more than 70 million paying users, and nearly 700 million monthly Tencent music paid. The user is only about 100 million.

In the previous April issue of Spotify's listing document, Tencent held 7.5% of its shares. At the same time, Spotify also holds 9% of Tencent Music's share music. Tencent's listing will expand Tencent's own music business growth outside of China and Asia. The capital perspectives of the two sides have been bundled with each other. The strategic level of Tencent Music also indicates that the layout will start early.

  • User growth

The core competitiveness of the online music platform is the number of platform users and the proportion of users paying. Especially after the listing of Tencent Music, the rapid growth of overseas users is an important indicator of the impact on its stock price.

As one of the largest providers of online streaming music, Spotify, after leaving the Swedish mainland to travel across the Atlantic, in order to adapt to overseas markets, in the test development of new users, found the music played by Spotify users active on Facebook. More than Spotify users who are not active on Facebook.

So, Spotify chose to work with Facebook. In order to eliminate many of the obstacles in the user registration process, the technical help allows Facebook users to create a free Spotify account in seconds. This helped Spotify get early-stage overseas seed users from users of the Facebook platform.

Most of Tencent's domestic users are from Tencent's own user resources, but it may be helpful for Tencent Music to get the social gameplay that users are good at overseas. It may refer to Spotify's gameplay.

  • Copyright and payment aspects

Spotify has signed a copyright license agreement with music companies such as Universal Music and Sony in the past, but after it went to sea, it did not sign a copyright agreement with any of the top four major record companies. Instead, it began to directly try to establish cooperation with artists. Get the copyright. This kind of circumvention of traditional music content companies will inspire more music.

The creator creates better products and gets more generous income. Tencent Music has also done some music plan and Tencent Music Public Welfare. It seems to be strengthening the connection between music works, musicians, offline performances, etc., but it is necessary to understand the nature of the connection is the assessment of user subscriptions, and paid users. proportion.

Compared to Tencent Music, Spotify always starts with users, for non-paid registered users, accessing millions of songs through the Spotify app, sharing playlists with friends, and playing local music files.

The free version of Spotify will force the advertisement to play. Although it has limitations, it is still an intuitive and valuable application. It does not affect the user's best listening experience. The sound quality of the song itself is not compromised. Users can download their favorite music for free and easily, and if the experience is good enough, they are willing to pay $10 per month to use Spotify.

This move is similar to the membership system of the current domestic video website. The primary condition for doing so is still copyright. Copyright and payment are complementary to some extent. Only the cost of copyright is low. The platform dares to give the user experience for free, and the user can be converted into a paying user.

According to Spotify's financial statements, it is still a loss, so for the upcoming Tencent music, or slightly behind the Netease cloud music, the cost of copyright reduction and the increase in the payment rate, but it is boiling . Especially in the future, the market is generally optimistic about the music performance market. These will provide important support for the online music platform to achieve profitability.

The squid effect generated by the multi-block linkage of the online music platform will have great premium and imagination. It is also very beneficial for the stock price of Tencent Music after the listing to rise. It is also a process for online music that is being accepted by the Internet. It is actually a microcosm of the development of the content industry.

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