Our reporter Xie Ruolin
After the market close on May 24, NetEase Cloud Music disclosed its financial report for the first quarter of 2022.According to the financial report, in the first quarter, NetEase Cloud Music’s revenue was 2.067 billion yuan, a year-on-year increase of 38.6%; the loss during the period was 180 million yuan, narrowing year-on-year; the adjusted net loss was 152 million yuan, which also narrowed year-on-year.
Kuang Yuqing, the research founder of Lens Company, told the "Securities Daily" reporter that in the past, online music copyright competition was fierce, and the price of exclusive music copyright was high. Now, under the background of anti-monopoly, the cost of upstream music copyright acquisition has dropped, and the industry has gradually entered healthy competition.
iiMedia Research CEO Zhang Yi told the "Securities Daily" reporter that NetEase Cloud Music's revenue growth rate was high in the first quarter, and the loss margin was also narrowed, which is the highlight of the performance.However, judging from the financial report, the company's loss narrowed mainly because of cost savings. In terms of business model, it has not explored the path of "open source", and it is unsustainable to continue to rely on "throttling".In the future, the company should embark on a new revenue-generating path that does not depend on members.
"Buy 1 Get 9" Promotion
Online music membership soars
NetEase Cloud Music’s revenue is divided into two parts: online music business and social entertainment business.Among them, online music service revenue mainly relies on membership subscriptions.In the first quarter, the revenue of this segment was 885 million yuan, a year-on-year increase of 16.5%.The increase was due to a surge in membership subscription sales.However, in the first quarter, the number of monthly active users of NetEase Cloud Music's online music service was 182 million, a slight decrease from the same period last year, but the conversion of payment increased. The number of monthly paying users increased significantly by 51.26% year-on-year to 36.7417 million.As a result, NetEase Cloud Music's membership subscription revenue in the first quarter reached 710 million yuan, a year-on-year increase of 38.13%.
NetEase Cloud Music said, "The increase in membership subscription revenue was mainly due to our collaboration with other platforms to increase the sales of joint membership packages, in which our membership subscriptions are sold at discounted prices to market our subscriptions and expand our service coverage."
According to the financial report, in the first quarter, NetEase Cloud Music online music service "monthly revenue per paying user" was only 6.4 yuan, compared with 7.1 yuan in the same period last year.
The promotional poster released by NetEase Cloud Music in January shows that an annual card priced at 158 yuan, users can also receive "Mango TV Annual Card + Himalayan Annual Card + NetEase Yanxuan Annual Card + Quick View Comics" after purchasing through the event. Season Card + NetEase Game Super Member + "Overwatch" Legendary Collection Edition + "Shore of the Earth" Spring Festival Gift Pack + "A Chinese Ghost Story" Xianyin Sweet Gift Pack", the value of the gift alone reaches 1297 yuan.The poster declared, "NetEase Cloud Music United Member, Buy 1 Get 9".
A brokerage analyst who focuses on the TMT industry told the "Securities Daily" reporter that for a long time in the past, promotion and promotion has been a common marketing strategy in the Internet industry, which can effectively accelerate the expansion of product scale, but the disadvantage is that once the user scale reaches bottleneck, and then increasing the unit price may lose some price-sensitive users.In other words, the scale expansion brought about by low prices has a "puffy" component.
Monthly revenue per paying user
Reduce by 40%
Although the number of users of online music is growing rapidly, in terms of revenue ratio, the contribution of "social entertainment services and others" is higher.In the first quarter, the revenue of this segment was 1.182 billion yuan, a year-on-year increase of 61.6%, of which audio live broadcast accounted for most of the live broadcast business and grew rapidly.At the user level, in the first quarter, the number of monthly paying users of NetEase Cloud Music social entertainment service reached 1.1817 million, a year-on-year increase of about 170%.However, the monthly revenue per paying user was 329.8 yuan, a year-on-year decrease of 40.39%.
NetEase Cloud Music said, "Through a large and stable user scale and strong user participation in the first quarter, we successfully rejuvenated our differentiated community."
The financial report shows that in the first quarter, the daily active users of NetEase Cloud Music listened to songs for about 82 minutes, compared with 76.5 minutes in the same period last year, and about half of the users browsed the "comment area" while listening to songs.As of the end of March 2022, the proportion of music playback recommended by the platform has risen to 33%, the total number of playlists created by NetEase Cloud Music users has reached 3.25 billion, and the content of UGC podcasts covers about 20% of the total user base.The number of registered independent musicians on the NetEase Cloud Music platform exceeded 450,000, a year-on-year increase of about 70%; a total of about 2 million music tracks were created.
At the product level, in the first quarter, NetEase Cloud Music also launched a number of user-oriented innovative functions such as seamless playback and double-speed playback, and launched Hi-Res sound quality to test the "Cloud Random" custom random playback function.
