Original title: What kind of new types of products will Tencent Music, which has added longer audio, evolve into the market? Source: iAre.com
Text: Wu Junyu
Sound has always been an important form of content consumption.
On Christmas Eve 1906, America's Fessendon and Alexandson set up a radio station near New York and broadcast for the first time ever. The broadcast included two jokes, a song, and a solo violin. This radio program was clearly heard by people with receivers scattered all over the place at the time.
Over a period of more than half a century later, the form of content consumption such as sound gradually declined; it gradually became quieter with the rise of television and the Internet. However, the transformation of media is always a strange thing. History is often in a cycle. A moment of decline does not mean that it will go down forever. Audio is once again on the rise with AI and the upcoming 5G.
Since February of this year, Spotify has continuously acquired the podcast content production company Gimlet Media, and the podcast content production and distribution company Anchcor has entered the podcast market.
In June, Apple announced the cancellation of the long-standing iTunes music and video store and chose to replace it with three different services, Apple Music, Apple Podcast, and Apple TV.
On December 3, Kuwo Music, a subsidiary of Tencent Music Entertainment Group, announced the “10 billion sound system” long-term audio recruitment plan for all fields. The program is aimed at graphic, self-media, podcaster, music and video creators. It will support the creation of long-term audio content with 10 billion resources+funding to promote the commercialization of high-quality content. Subsequently, Kugou Music, a subsidiary of Tencent Music and Entertainment Group, also launched the “Radio Anchor Entry Incentive Program” to invite radio anchors or interested users from all over the network to enter.
If you sort through the development paths of some of the world's leading streaming music companies, you'll find that they are collectively strengthening their podcast layout.
This concerns not only the evolution of content forms, but also the exploration of business models. The sound is likely to carry more this time around.
one
International competition for podcasts
In the international market, Apple, Spotify, and YouTube are competing in the form of content called podcasts.
If you look closely at Apple's move to cancel the iTunes music and video store, you'll see that it is downplaying music services and focusing on music entertainment services. You know, at the end of last year, Apple's senior vice president of video and news, Eddy Cue, raised an opinion in his few public appearances:
I think podcasting is experiencing a huge revival, which is exactly what consumers want, because they can listen to what they want and when they want.
Judging from the data, 51% of users across the US use podcasts, while 49% of users use podcasts in cars — it can be seen how popular the podcast product form is.
Although Spotify has become the world's largest online music service provider, with hundreds of millions of users, it also has the largest number of paid members in the world. However, the company also seems to be quietly transforming, expanding from music services to another new field: online audio content or programs, hoping to become an “audio version of YouTube.”
Spotify CEO Daniel Ek proposed a new strategy in his blog at the end of last year: “Audio, not just music, will be the future of Spotify.”
In February of this year, Spotify bought Gimlet Media, a Brooklyn broadcasting network company in New York, for $230 million. Then, in March, Spotify acquired Anchor, an audio content creation technology company.
Anchor was originally designed to make it easy for anyone to create audio content by recording directly on their phone. In September of this year, Spotify even revamped its own product — introducing a new “Your Daily Drive” model, which uses a personalization engine to match users with music and information, and the two will mix in a waterfall.
The mantis caught the cicadas and the yellow finch, and when a fierce battle between Spotify and Apple in the podcast market was in full swing, YouTube, a giant originally in the video market, got in.
In fact, the purpose of the podcast competition between Spotify and Apple is not just podcasting; the two even want to steal the Netflix market.
Because a recent survey in Canada showed that 43% of people “went to YouTube to watch podcasts” in the past year, this puts YouTube ahead of Apple Podcast (34%) and Spotify (23%). Today, YouTube continues to expand its reach through podcasts.
Tencent Music Entertainment Group's launch of long audio at this time is just following the trend of podcasting being promoted by Apple, Spotify, and YouTube.
For Tencent Music Entertainment Group, although it has not actually launched a podcast strategy yet, it may bring more different things with its ability to innovate at the business model level.
two
Evolution of product forms
Long audio is a lightweight species and a tool for “IP development”. It's lightweight enough that it doesn't come with too many additional costs. In fact, long audio content is also divided into various types. One is the general information category, knowledge category, and novel category.
In the past, the long audio logic of the domestic market was that celebrity celebrities were heavily contracted to establish paywalls through drainage, but the result of this model is likely to be insufficient renewal rates and high content production costs, which can easily cause the model to become unsustainable.
However, if you look at the models of Tencent Music Entertainment Group, Spotify, and Apple this time, you will find that they focus on the UGC model. The advantage of the UGC model is that it is easy for new IPs to constantly emerge, and it can also verify the value of old and new IPs.
This is already happening in the US: IP development uses podcasts as a starting point to verify viability. Once a podcast is popular with content consumers, it will soon be developed into a movie or TV series.
Podcasting is now becoming an increasingly popular form of IP, or channel for IP cultivation.
In the US, podcasts are actually gradually becoming an inexpensive tool for testing whether a script is qualified. Producers Marc Smerling (Marc Smerling) and Zac Stuart-Pontier (Zac Stuart-Pontier) teamed up with Gimlet Media to launch the documentary podcast “Crimetown” (Crimetown).
The podcast was broadcast in 18 episodes, with a total investment of $500,000, which is only a fraction of the TV show's budget. Three months after the video went live, it had 16 million downloads. The US FX Cable Network is planning to broadcast the podcast in the form of a cable TV series.
“The New York Times” has a movie called “Modern Love” that is popular all over the world this year. The origin of this movie is actually a story serialized in the “New York Times.” In the US, in-depth, non-fictional reports derived from news media are becoming important IP sources; they will be developed into audio, documentaries, and even videos.
The advantage of long audio is that it is relevant to information, videos, novels, and even social networking.
For Tencent Music Entertainment Group, long audio is a relatively lightweight form of content. It can be cross-linked with the group's other content products.
In the past, Changaudio had limited room for growth in the hands of several domestic startups, so it is difficult for it to evolve too much in terms of product form. It's like a creature you don't know what kind of creature it will grow into in the future. If you put it in a fish tank or pond, there won't be much room. This imaginative creature should only be released into the ocean.
However, with the addition of Tencent Music Entertainment Group, long audio can enter an “evolutionary frenzy”. It can have all kinds of experiments, and may evolve in forms that you cannot imagine.
1. Long audio and information
With the development of 5G, news forms will become more rich and diverse. Podcasts have been and will be one of the important channels for news. Tencent Music Entertainment Group can link Tencent's resources. Among them, Tencent was originally a major news producer. In the future, Tencent Music Entertainment Group's long-form audio may also carry more information and pan-knowledge content.
Information and general knowledge are originally suitable for sound, which is suitable for playback in smart speakers and car radios. Non-fictional long-form reports derived from information are getting more and more attention. They are being continuously developed into IPs and even sold to film and television development companies. However, film and television development companies don't know how high the gold content of an IP is until they buy the book. If it can be verified through long audio, the success rate of IP development may be higher.
2. Long audio and novels
One point worth noting is the collaboration between Kuwo Music and Reading Group. Reading Group and Tencent already have very strong ties.
Reading has a huge IP copyright base. The exact monetization time and method of monetization are uncertain. In particular, the process of IP going directly to movies, TV, and games is a “thrilling leap”. If one step does not go well, it may cause difficulties in IP development and production.
Currently, the flagship product of Reading Literature Group is for lazy people to listen to books, and the scope of coverage for lazy people is relatively limited. The user base of Kuwo Music is biased towards a sinking market. The link between long audio and novels can promote the IP verification work of the Reading Text Group.
Long audio is tantamount to bridging an important link in the huge industrial chain of “fiction, audio, script, film and television.” This link allows Tencent Music Entertainment Group to be smoother in the IP development process (avoid policy risks, verify market popularity), and can even achieve a round of monetization in the audio process, and move on to the next stage after verification and maturity.
3. Long audio, live streaming, and video
Long audio can also be used as live streaming content. Live audio streaming is also a very impressive product form. Tencent Music Entertainment Group is already experimenting with live streaming and video content, and will need a lot of IP support in the future.
Especially in the current situation where content production costs are high, the good IP that has emerged from Kuwo Music's UGC production model can be developed a second time. Combining good IP development with content customization can help Tencent Music Entertainment Group expand its content ecosystem and reduce content production costs.
three
Exploring business models
The rise of long audio content will bring more and more payment models. There are three types of podcast profit models: membership, live streaming, and advertising.
In fact, one of Spotify's podcasting purposes is to further expand the paywall and bring new profit points to the enterprise.
The US market research media Westwood One published a data report this fall. The report shows that podcast event participants are willing to pay an average of $42 for a live broadcast. Heavy podcast users and newcomers prefer to pay for exclusive content.
At home, Long Audio has shown the division of two business models:
One is the Himalayan, get this kind of membership model. The membership model is more like the audio version of Netflix, attracting users through celebrity streaming in an attempt to establish a paywall;
The other is Lychee FM, an audio live streaming mode. The live streaming model, on the other hand, relies on the UGC model, places more emphasis on the emotional connection between the platform's audio anchor and users, and forms a payment model through rewards.
In November of this year, 36 Krypton published a report called “China Podcast Case Study - Himalaya, Dragonfly FM, Lychee”. This report shows the growth of audio payment users over the past three years.
In contrast, as a one-stop music entertainment platform driven by online music+social entertainment, Tencent Music Entertainment Group's advantages are even more obvious. According to Tencent Music Entertainment Group's third-quarter earnings report, its online music paid membership increased by 42.2% year over year to 35.4 million.
Tencent Music Entertainment Group is now focusing on long audio; in fact, it is also competing for user hours. Over time, it is not impossible for long audio to form a new paywall. In particular, long audio can easily create a social or community atmosphere. In the early days, Twitter's predecessor was actually a podcast platform. In the community atmosphere, social entertainment payments were easily driven.
As far as Tencent Music Entertainment Group is concerned, with long audio now, the future may be the same as Spotify, with the possibility of further enriching its business model.
Long audio is only one step away from podcasting; current experiments are actually laying the foundation for future product shape changes.
From the perspective of economist Hayek, the development of business is also an evolution, and how it evolves depends on the evolution of the environment. At the stage where the mobile Internet value cycle is about to end and the industrial Internet value cycle is about to begin.
No one knows what role long audio or podcasts will play in people's living environments in the future, but as the movie “Jurassic World” said: there is always a way out.
Long audio is like a species. It will always find its own place in the future business environment by combining different products.
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Author | Oh Joon-woo's official account | How many degrees in depth