Tencent and Ali two major music camps compete against copyright fans. Who is the killer?

As China Music Group and Tencent merged their digital music business,"Tencent has won Ocean Music" that has been going on for several days has finally been confirmed. As a result, how will the "Tencent System" that wins through copyright and the "Ali System" that plays fan economy? Which of the two camps is more favored?

Original title: Copyright vs. fans who are the killer of online music

With the merger of China Music Group (hereinafter referred to as "CMC") and Tencent's digital music business, the "Tencent has won Ocean Music" that has been going on for several days has finally been confirmed. Since the promulgation of the strictest copyright order last year, mergers between online music platforms have continued to take place. The merger of Ocean Music, which has the largest market share, and QQ Music, which has the largest copyright volume, has undoubtedly attracted the attention of the music industry. As a result, what will happen between the "Tencent System" that wins with copyright and the "Ali System" that plays the fan economy? Which of the two camps is more favored?

The combined market share exceeds 70%

. According to currently released information, Tencent will own more than half of CMC after the transaction is completed, but the three major online music platforms of QQ Music and Ocean Music, Kugou and Kuwo, will still retain independent brands and operations. Judging from the market share of online music platforms in the first quarter of this year, Kugou Music ranked first in the market with a market share of 33.73%. The second and third places were QQ Music with 18.91% and Kuwo Music with 18.73%, respectively. The merged "Tencent" accounted for more than 70% of the market share.

Before the acquisition, although Ocean Music had the first share, the high copyright cost also brought huge survival pressure. According to industry insiders, Ocean Music went public in the United States before to obtain capital to balance copyright costs and difficulties in monetization. This copyright cost is the biggest driving force for the cooperation between QQ Music and Ocean Music. Ocean Music, which failed to be listed, can only be committed to Tencent. In exchange for surviving capital.

Tencent also has its own layout, and it can also be seen from its previous copyright distribution with Netease Cloud Music and Domi Music. Wang Yi, director of Evergrande's music marketing, told reporters,"The copyright premium costs are too high, the operating model and business model are immature, and the payment model is not objective, resulting in the previous copyright war not recovering the corresponding costs. Moreover, Ocean Music's capital chain and profit model without the support of major backgrounds such as Alibaba and Tencent are poor. It is hard to say whether it can continue until the oligarchs 'war of attrition. This is also an alternative solution for Ocean Music on its way to listing."

In the music field, the merger of Kugou and Kuwo Music, as well as Ali's integration of Tiantian Music and Shrimp Music, mergers and acquisitions have also become important events in the digital music market in the past two years. The merger of QQ Music and Ocean Music will make it easier to get through sharing, save some costs, and interworking with complementary users and live broadcast services. More business connections have been formed from previous small-scale cooperation.

Reports pointed out that after this transaction, CMC will be valued at US$6 billion, and will continue to choose to list in the United States. But it is worth noting that as a representative of the global music streaming platform, Spotify, which has been developing for nearly a decade, is still on the road to financing. Pandora, the only company that has been successfully listed in the United States, has its share price dropped from a peak of US$70 to US$13 today.

Wang Yi said that companies will not choose to go public if they have no problems in terms of capital, operations, etc., and the corresponding structure requires funds to expand their business or carry out consumer business before they will seek capital. From the current perspective, the profitability of the entire online music industry is not very impressive.

Difficulties in making profits on online music are common.

After the National Copyright Administration issued a ban on removing sales last year, major music platforms turned to copyright purchase, making record companies a hot spot for everyone to compete for. On the other hand, for the declining music industry, digital music copyright revenue is undoubtedly a new profit point for major record companies.

A senior industry insider helped the reporter calculate the account. Judging from the fact that Tencent owned more than 20 exclusive music copyrights at the end of last year, the copyright fee may be as high as more than one billion yuan. Last year, a new domestic record company reached an exclusive copyright agreement with a platform. The copyright fee for 300 songs was as high as 20 million yuan, or about sixty to seventy thousand yuan per song. However, copyright generally has a time limit of about two to three years. Behind the high cost of copyright, the benefits are far from enough to make up for the large amount of losses.

According to Ding Xiaochen, director of the product research and development department of Kuwo Fan, there is no good way to monetize foreign digital music. KAT has invested heavily in copyright before, among which QQ music has the most copyright. After the legalization of copyright, copyright prices have increased a hundred times, especially since exclusive copyright cannot recover the cost at all.

For a platform, the expenditure on purchasing copyright accounts for about 30%-40% of the total cost. This huge cost directly forces online music to open a charging model. Currently, paid music packages such as QQ Music, Netease Cloud Music, and Alibaba Planet range from 8 to 10 yuan a month. Although differences have formed among music platforms due to factors such as copyright protection and high copyright fees, and this market environment is also conducive to de-profit and monetization, relevant surveys have also shown that due to users 'consumption habits of paying for music content, the effectiveness of paid music services is not optimistic.

Nowadays, a digital album costing around 5 yuan seems to have given many platforms a new dawn. Data shows that the singers working with QQ Music Digital Album have included more than 40 musicians including Lu Han, Zhou Bichang, and Li Yuchun. The cumulative sales of albums have exceeded 20 million, and total sales have exceeded 100 million yuan. In the eyes of industry insiders, paid income including members, paid packages, digital albums, etc. will gradually increase and become a source of income that cannot be ignored in the online music industry, but it is not currently a core business model.

Ding Xiaochen analyzed,"Each of the major platforms has its own advantages and disadvantages. The Ocean System has a user base. Tencent and Ali have platform advantages. However, none of the three parties has found a profitable business model. Ali's 'Fan Amus', Tencent Live Broadcast,' MUSIC+', Cool Dog Star Live Broadcast is all about playing fan economy, but they are also exploring."

After the copyright change between the two camps

, three giants were formed, mainly the Ocean System, Tencent System, and Ali System. Today, a large number of "Tencent System" music, which has the first copyright and the first market share, seems to have been firmly in control. Win the situation of "one family alone" in online music.

"QQ Music still wants to monopolize the market exclusively and let others buy it when the copyright becomes bigger." Industry insiders analyzed. However, QQ Music also has a strong rival, Ali Music. Although Ali Music hopes to build a music ecosystem to gain later profits rather than focus on copyright wars, based on Ali Music's copyright status, music resources, capital strength, etc., Ali Music is indeed "half of the country", and it will take some time for QQ Music to dominate it.

Moreover, Ali Planet is defined as an entertainment interactive platform integrating fan entertainment, big-name live broadcasts, online music, and behind-the-scenes heroes. It is expected to reverse the lack of copyright in Ali Music. "Alibaba Planet is not just a player. Market share does not represent profitability. The key is revenue and profits." Wang Yi added.

From the perspective of business models, compared with the Tencent system, which takes copyright as an advantage, who can seize the opportunity and open up high-quality monetization channels as the long road to digital music monetization?

In Wang Yi's view,"It's not who is better, but whose model is more suitable for your own positioning in the company's development." Ali is a company based on e-commerce and transactions. It focuses on procurement and consumption, including B2B, B2C, C2C and other models. In fact, Alibaba Planet is doing what Ali originally looked like in the music field. It can be said to be music Taobao. But Tencent is different. Tencent is based on social interaction between people, including QQ, Qzone, WeChat, etc., and is a product for interactive life scenarios. The future development of the two camps depends on which is more suitable for the product direction carried by the corporate culture, and whether the fit with the market and audience is unified and consistent."

Audition is only part of online music. The online music platform is no longer a single player tool, but an Internet music platform that can communicate, create originality, and create a fan economy. It is worth noting that "the fan economy has developed rapidly in the past two years. In the past few years, there was no phenomenon that it was difficult to get a ticket in the performance market, but now, the performance market has become a demand for fans." Wang Yi believes that the future visual arts field has great potential and can be combined with more technologies such as VR.

Editor: yvette