Online music platforms are questioning their ability to monetize the land and their business model prospects are pending

Like the fiery sharing economy, major online music platforms have not found mature business models. However, their current solution is very simple-first "race around the ground" and then gradually explore.

folk singer Zhao Lei, who has become famous with his song "Chengdu". In fact, before Zhao Lei appeared on "Singer", online music platforms including Netease Cloud Music, Shrimp Music and QQ Music had done a lot of work around independent musicians.

From cultivating singers and robbing copyright to the current "robbing people", after entering the copyright era, the competition in the music industry has become more intense. Unlike old record companies that "hired" signed singers, today's online music platforms have shifted their attention to working with independent musicians. In the process of cooperation, the online music platform is not the "employer" of independent musicians, but more like a service provider. Both parties have no contractual restrictions and each takes what they need.

The rewards of "robbing people" are also obvious. On April 11, Netease Cloud Music announced that the number of users exceeded 300 million and received 750 million yuan in financing. At the same time, Alibaba Music exclusively renewed Rolling Stone Records and acquired Damai. com, hoping to upgrade Alibaba's music business through the fan economy; after the QQ music business merged with CMC (China Music Group), Tencent became the largest player in the domestic online music field.

Like the fiery sharing economy, major online music platforms have not found mature business models. However, their current solution is very simple-first "race around the ground" and then gradually explore.

Singers are "indifferent", and platforms are "robbing people"

. In July 2015, the National Copyright Administration issued the "Notice on Ordering Online Music Service Providers to Stop Unauthorized Dissemination of Music Works", and the online music industry began to enter the copyright era. As the traditional recording industry disintegrated under the impact of Internet music, online music platforms have become a habitat for independent musicians.

The significance of the Internet in reshaping the music industry is not only that it has changed the traditional delivery methods of cassettes and CDs, but also that it has changed the employment relationship and strong and weak relationship between the original contracted singers and record companies. In the early years, record companies were extremely strong in front of singers, and their relationship with bosses and employees was no different. Under the old pattern, record companies started cultivating singers from newcomers, were highly consistent, and constantly created musical styles suitable for singers. Before singers became famous, there was almost no room for choice in their own musical styles. This phenomenon has almost disappeared in the online music industry in the copyright era. According to a person in charge of Alibaba Music, the current situation is that independent musicians are strong and the platform is only a service provider.

Looking at the current so-called popular artists on the front lines, none of them have the management rights in the hands of record companies. Wang Feng and others established their own companies one after another, and outsourced different aspects such as performances, ticketing, and distribution to different companies, taking the ultimate lead. Li Yuchun, the 2005 Super Girl champion, also established an independent studio after his 10-year contract with Tianyu Company expired.

Someone once said that in Asia, record companies are the bosses,"both fathers and mothers", while Western record companies are just "nannies" for singers. Nowadays, major online music platforms in China are beginning to play roles similar to Western record companies. Independent musicians do not need a platform to select songs, create music styles and packaging for them. Conversely, music platforms are not qualified to require them to have any loyalty to the platform. Ding Bo, vice president of Netease Cloud Music, said that the role of the platform is a supporter of independent musicians, not a leader, let alone an employer. "What they hope to gain on the platform is fans, attention and good works, and there are no contractual restrictions between them."

After music copyright was legally protected in 2015, the competition among various platforms for existing copyrights in the hands of major record companies has come to an end, and the competition has gradually shifted to the competition for incremental copyrights. The producers and holders of incremental copyrights are mainly independent musicians. In other words, the industry pattern has changed from "grabbing songs" to "grabbing people". Even if the relationship with singers is "distant", getting more independent musicians to settle in and discovering more outstanding independent musicians is still the only choice for music platforms to survive and compete. "For well-known independent musicians like Song Dongye, the copyright they hold is big IP, which is no worse than the so-called 'first-line artists'." A staff member of Ali Music said.

In order to "rob people", online music platforms have launched various "plans" to support independent musicians. Alibaba's Shrimp Music was the first to launch. In 2014, it proposed the "Light Seeking Plan" and has now gathered popular independent musicians such as Cheng Bi and Jin Wenqi; Netease Cloud Music, which uses folk songs as a key music type, 2016 The "Stone Plan" launched in November attracted more than 10,000 independent musicians to enter in three months;QQ Music also launched the "Music+" plan, which targets Japanese and Korean idols as key IP creation targets.

However, the current star-making capabilities of online music platforms are still not as good as TV. "We have made a lot of efforts, but in the end, we still have to rely on the mainstream media's 'door'. It is Hunan Satellite TV that makes Zhao Lei famous, not the online music platform." The above-mentioned person in charge of Ali Music told reporters.

Liquidity has been questioned. Online music platforms whose business model prospects are pending

are taking frequent actions and projects are constantly being implemented, but they still cannot conceal their embarrassment in development: poor liquidity and lack of mature business models. Statistics show that the combined revenue of the three major platforms of Alibaba Music, QQ Music and Netease Cloud Music in 2016 was only 200 million yuan. In the era when major traditional record companies dominated the same place, the annual revenue of any large company can easily exceed 100 million yuan. If currency devaluation is added, the gap is even wider.

The inability to make money through advertising models is an important reason for the poor monetization of online music platforms. Online music platforms have tried the traffic model of early Internet portals, using the attention and number of plays of high-frequency words to gain the favor of advertisers, and then using advertising as a stable source of revenue. But music, unlike video, is not a hotbed for advertising. The above-mentioned person in charge of Ali Music said: "It is easy to insert advertisements on videos, which is no different from what previous TV stations did. However, music is presented in audio form and there is no space to insert advertisements. Moreover, the application software page size is limited, which is inconvenient to set aside for advertisements. If enough space is available, users will not pay attention to advertisements presented in small locations."

In view of this, major music platforms can only choose a "simple and crude" operation method-racing around the ground. "As long as the territory is big, there is no need to worry about not having opportunities to monetize." This famous saying, online music platforms believe that the same applies to themselves. However, the "land" here is no longer a variety of shops, but an independent musician. "We have tried this before. Some second-tier artists are not well-known across the country, while some second-tier brands focus on niche lines. They may need each other, and Ali Music can match them." The above-mentioned person in charge of Ali Music said. However, he also admitted that all kinds of practices are just attempts."At present, no platform dares to say that it has really found a reliable business model. Everyone is exploring it."

Netease Cloud Music is full of hope for the future. "Compared with the Western music industry, which often pays 30% to 50%, the current payment rate for online music in China is only 5%, and there is still huge room for growth. In the context of legalization, music users 'awareness of payment has increased rapidly. In the past year, the number of paid Music subscriptions on Netease Cloud has increased 9 times year-on-year, the number of paid digital album buyers has increased 7 times year-on-year, and digital album sales have increased 16 times year-on-year, and continue to grow this year. I am optimistic about future profit margins." Ding Bo, vice president of Netease Cloud Music, told reporters.

Editor: Nancy