Tencent Music bets on China’s crowded podcasting space

Tencent Music bets on China’s crowded podcasting space

Listeners of podcasts, audiobooks and different audio reveals are estimated to quantity 542 million in China this yr, in line with a third-party survey by advertising agency iiMedia. It’s a wholesome bounce from the 489 million customers recorded in 2019, and it little question has attracted new gamers to the sport.

That contains Tencent Music Entertainment (TME), the Tencent spin-off that’s generally thought to be the Spotify of China however differs on many fronts in follow. The group’s essential line of companies goes past music streaming to embody digital karaoke, dwell streaming and audio content material, a class that has lately seen an enormous push from the agency.

In its newly launched quarterly report, TME stated it has made “important progress in increasing” its audio library by including 1000’s of latest adaptions from in style IP items and works from impartial producers. This intensifies competitors in what’s already a crowded house.

Like Spotify, TME is late to voice-based content material, an umbrella time period that may embody every little thing from podcasts, audiobooks, radio stations to extra revolutionary listening expertise like audio dwell streaming. This sector in China has for years been occupied by main firms Ximalaya, the principle investor in San Francisco-based podcasting agency Himalaya, and Nasdaq-listed Lizhi.

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TME’s thrust into audio content material holds no quick promise, for there may be nonetheless no apparent path to profitability. Chinese customers are recognized to be reluctant to pay for digital content material, and once they do, say, for academic and self-improvement podcasts, the passion tends to fade rapidly. Deep-pocketed platforms usually resort to providing content material without spending a dime to realize market share, relentlessly forcing out smaller contestants. The result’s that everybody wants to seek out extra oblique methods to monetize.

Lizhi, as an example, primarily generates revenues by promoting digital objects via its dwell, interactive audio periods, whereas the contribution from consumer subscriptions and promoting stays paltry. The seven-year-old firm hasn’t turned a revenue, recording a internet lack of 133 million yuan or $19.1 million final yr.

Indirect monetization is nothing new in China’s web business. Tencent, most well-known for its WeChat messenger, notably depends on gaming revenues that its social networking merchandise assist drive. TME, equally, will get the majority of its cash by promoting digital objects in music-themed dwell streams, whereas solely 6% of its 657 million month-to-month lively customers on music streaming apps are paying. The MAU development has additionally come to a standstill as China’s on-line music market saturates; from 2017 to 2020, TME added solely 50 million new customers to its music streaming companies. The query is whether or not the music titan can breathe new life into the adjoining audio sector.

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