Original title: Tencent Music: Love, Trust, and Persistence Source: PingWest Pinplay

Unbeknownst to me, Tencent Music Entertainment Group (TME or Tencent Music for short) is celebrating its fourth birthday.

From July 11 to 12, as one of the theme events for the fourth anniversary, Tencent Music hosted the “TME Open Mic” pop-up event at Taikoo Hui in Shanghai. 20 small stages and 20 microphones were set up in the open air plaza for passers-by to sing and experience. At the same time, themed parties and live broadcasts of Chen Yixun's charity concert were also arranged. The event was also touted as “Music Restarts Life” with the intention of “using music to express and encourage users and the industry to return to a better life.”

As early as a day ago, as another step to celebrate the fourth anniversary, Tencent Music just released an open industry letter entitled “Wishing to Build Wings of Dreams for Believers” and launched a new brand visual supersymbol called “THE WINGS Infinite Wings.” As a leader in online music and entertainment services in China, since its establishment four years ago, Tencent Music has always shouldered the responsibility of “creating beauty for users and exploring future paths for the industry,” while the new brand visual supersymbol “THE WINGS Infinite Wings” has pinned the hope that Tencent Music and the industry will “fly faster, higher, and farther.”

Looking back at the past development of Tencent Music, what we see is an image of a person who loves, believes, and persists. It has accompanied the development of China's digital music industry almost all the way, and continues to export value. Persistence is reflected in various aspects of competition and business innovation, and behind it is an enterprise's clear judgment of the market and, more importantly, its grasp of its own direction and mission.

A deep understanding of the content

Every time the digital music industry is mentioned, content copyright is a topic that cannot be circumvented. Like Internet video, its essential core is the content platform. Tencent Music also wrote in an open letter, “We believe content is the source that unleashes the value and vitality of the industry.” However, when we look back at the development history of Tencent Music, we will have a very clear and unequivocal perception that its understanding of music content is often ahead of its peers.

This can be traced back to the days when piracy was rampant.

In a normal perception, listening to genuine music is a matter of course, but for various reasons, China's digital music industry has been shrouded in a dark cloud of piracy for more than 10 years. Against this backdrop, Tencent Music's crackdown on piracy is particularly valuable. This comes from its insistence.

Since 2011, Tencent QQ Music has played a pioneering role. In 2013, Tencent QQ Music and seven record companies formed the “7+1 Digital Music Rights Protection Alliance” to carry out genuine rights protection actions; from 2014 to 2017, apart from promotion at the national policy level, Tencent Music was the first player on digital music platforms to promote legalization.

In July 2015, the National Copyright Administration issued the “Notice on Ordering Online Music Service Providers to Stop Unauthorized Dissemination of Musical Works”, known as the “Strictest Copyright Order”. More than 2.2 million unauthorized music works were offline on various platforms, which is regarded as the first year of full legalization of digital music in China.

Since then, Tencent Music has continued to legalize music, respect the copyright of authentic music, reached copyright content cooperation with domestic and foreign record companies, including Universal Music and Jewell Music, where Jay Chou is located, and launched a series of paid explorations around the content until now.

Many people may have forgotten that Tencent Music was the earliest founder of “digital albums”. As early as 2014, they first tried to sell Jay Chou's album “Whoops, Nice” on the platform in the form of digital music. Until now, this model has been accepted by the vast majority of record companies, singers, musicians, and quite a few users, and has also become the standard for all digital music platforms. It can be said that Tencent Music helped promote the creation of an industry standard; Throughout 2019, Tsai Xukun, Li Yu-chun, Zhang Yixing, R1SE, Rocket Girl 101, Taylor etc The singers have all generated tens of millions of sales. Of course, it's not just first-line singers; indie musicians such as My Sister and Chen Li, and singers like Chong Sum Yeon, who grew up on live music streaming platforms, have also had impressive results.

As the creator of this model, TME also remains a favorite platform for music fans to buy digital albums. In the first half of this year, TME's digital album sales accounted for nearly 80% of the total in the first half of this year, almost four times that of second place.

Tencent Music has never given up on exploring music payments. Although some users still don't understand “internet content payment,” music payment is an important sign of reviving the value of the music industry. It is the most direct and effective way to help the industry generate revenue. At this stage, experiments can also play a role in cultivating users.

These are also all of Tencent Music's insistence on the opposite direction.

Never stop innovating

Although content is important, for a music platform, the future development challenge will be comprehensive strength in all aspects from content to service. It tests the overall view of the enterprise, so it is essential to persist in innovation. Tencent Music has already made plans for this.

Innovation in digital music business models. Compared to many foreign music streaming media, Tencent Music's “online music+social entertainment” two-wheel drive business model can indeed be called a localized innovation based on Chinese digital music. In the early stages where public awareness of payment has not yet been developed and the digital music market is still expanding, social entertainment with music as the core can bring huge supplements to online music services, which has also become an advantage in the development of Tencent Music. The good news is that judging from Tencent Music's financial report for Q1 this year, the share of online music revenue increased rapidly year-on-year. It achieved healthy performance in the first quarter. Online music subscription revenue increased by 70.0% year-on-year, further increasing after 48.3% in the third quarter of 2019 and 60.1% in the fourth quarter.

Innovation in music content creation and production. For Tencent Music, this aspect is reflected in content innovation, such as establishing long-term in-depth strategic partnerships with upstream record companies, from copyright, promotion to marketing, and more in-depth cooperation than before; achieving more powerful personalized and accurate distribution at the level of algorithm technology; in March of this year, Tencent Music participated in completing the stock acquisition of Universal Music, moving towards a new blue ocean of value with in-depth cooperation and content co-creation with record companies.

On the other hand, it is also reflected in innovation in original content, such as increasing the discovery and support for musicians within the site; outside of the site, Tencent Music established an Asian electronic music brand Liquid State in a joint venture with Sony Music Entertainment in 2018, and also joined forces with Sony/ATV Soya Music Copyright to launch the “Polestar International Creative Camp Program” in June of this year, with the aim of creating high-quality original music content.

The innovation and emphasis on original content also essentially shows Tencent Music's idea that it doesn't want to rely entirely on ready-made copyrighted content. In the long run, it can undoubtedly also bring more value to the platform.

Business development strategy innovation. 2020 is the year Tencent Music's strategic layout was upgraded, and the three major businesses that will be key directions in the future were announced: the first is Long Audio. Tencent Music officially announced its Long Audio strategy on April 23. Peng Jiaxin, CEO of Tencent Music Entertainment Group, publicly stated, “Long Audio will be a strategic area where TME will continue to gain strength in the future.” The second is TME Live. Tencent Music is using this to set an industry benchmark for online concerts and open up users' online+offline experiences; the third is music broadcasting. Although music broadcasts are still in their infancy in China, with the improvement of music copyright, it is a blue ocean market with huge development space, and will also bring new room for imagination to upstream musicians. Completing its equity investment in China's benchmark offline broadcasting company Redeo in April is also considered a sign of its official entry into the live music market.

These are all the results of Tencent Music standing at a new point in time and further thinking about its development direction based on its own strengths, and not even any previous experience to refer to. Just as Tencent Music's mission is to “create unlimited possibilities for music,” innovation has become an important component of its corporate culture. Perhaps Tencent Music is bound to become suchPathfinderIts role is to find a wider range of possibilities for China's digital music industry; this is its insistence on the future.