According to data in Quarterly Monitoring and Analysis on China's Mobile Music Market in 2016Q4 released by Analysys, in 2016Q4, KuGoo and QQ Music still maintained the top 2 positions among China's mainstream mobile music platforms. With over 100 million active users respectively, both Platforms had remarkable superiorities. And Kuwo Music ranked third with 69.5646 million active users and led the competitive of mobile music products of ten-million-user level. NetEase Cloud Music continuously ranked fourth with 30.7575 million active users. Migu Music, with two major product function models with special characteristics of "Enjoy Listening" and "Enjoy Viewing" as well as promotion activities such as "Free Data Rate for Migu Music" based on the operator channel of China Mobile, made quite remarkable achievements in new user enrollment. With 23.6494 million users, Migu Music ranked fifth for the first time this quarter. The number of active users of Baidu Music increased slightly compared with previous quarter and ranked sixth with 20.916 million users. As Alibaba Planet under Alibaba Group completed stopped music services within its App, a great number of users abandoned the App and the rank of Alibaba Planet dropped to the eighth accordingly. To this end, differentiated development was designed for two music products under Alibaba Music, of which Alibaba Planet removed its music integration services mainly in form of music player and was re-oriented as the interaction platform for pan-entertainment fans, while Xiami Music maintained its stream media music services.
In Q4, the live video platform Fanxing Live under KuGoo was renamed as KuGoo Live, under the great tide of live video, KuGoo and its KuGoo Live established a complete set of "Star-making" industrial chain. With abundant genuine music libraries, simple operation functions, innovative Viper sound effects and multiple interactive styles with extended copyrights, KuGoo satisfied the demands of "listening, singing, viewing and playing" of the users. Meanwhile, KuGoo extended the business to upstream and downstream for the complete industrial chain and realized the "hard landing" of genuine music. It had successively launched hardware products such as KuGoo M1 Bluetooth Earphone, KuGoo Pandora Smart Stereo System, KuGoo K6 Smart Light Luxury HIFI System and continued the industrial layout from music software to hardware, from platform to terminals.
In Q4, QQ Music launched its Version 7.0, which optimized the module setup and interface UI and simplified search path. Meanwhile, it added functions such as "Running Radio", "Yesterday Once More", "Singer's Poster" and "Voice Greeting from Stars". The "Running Radio" not only established a brand new music atmosphere for the users, the intelligent song matching and diversified song list options also brought delighted experience of "Smart Running Mate".
After launching the only Top 100 MC List in China in June, Kuwo Music further launched the "master tape audio" with each song greater than 100 M in Q4. Such music pieces could be downloaded and enjoyed by the users for free and redefined the new height of music quality. Focusing on the users highlighting sound effects and enjoying listing to music while taking a shower/bath, Kuwo Music launched its second smart hardware product "Kuwo Water Spraying Resistant Bluetooth Loudspeaker S7” and held "2017 Kuwo China Top 100 MC Annual Party Liaoning Stop" on December 23, which provided a chance of close interactions between the fans and the MCs.
Music copyright is still the core resource for companies working in music industry. After the National Copyright Administration issued Notice on Commanding Online Music Service Providers to Stop Spreading Unauthorized Music Works, the importance of genuine music is more and more remarkable. Up to present, platforms are more permeating into the upstream of the industrial chain and gradually transforming from the mode of obtaining exclusive agency of music copyrights from record companies, sub-licensing of music copyrights and "agent" of authorization of audio of variety shows to the mode of "Self-production + Agent" on aspect of obtaining music copyrights. And the "self-production" mode was especially obvious in Q4, which was mainly reflected in a series of supporting program in original musicians. Migu Music aggressively released the "New Music Ecology" Program of RMB 3 billion on December 3. In the future 3 years, a total of RMB 3 billion will be invested on multiple aspects such as music copyright, events and performances, artist training, music releasing, programme production and innovative market. An investment of about RMB 750 million will be input just in 2017. The first highlight of the Program is sparing no efforts to support genuine music, establish China Original Music Incubation Program, and support original musicians. Coincidentally, on November 22, NetEase Cloud Music launched the independent musician supporting plan named "Rock Program". It's planned that an amount of RMB 200 million would be input on seven major aspects of generalization resources, album investment, performance opportunities, enabling praises, music training, musician peripherals and musician index system so as to make all-round supports on independent musicians. Baidu Music also announced publicly that it has started the "Baidu Musician" Program in October.
Field exclusive rate refers to the proportion of active users exclusive to one App in all active users in the field that the App belongs to, which directly reflects the relative competitive superiorities of the exclusive users of such App. Due to the first mover superiorities into the market and the refined operations in recent years, in December 2016, the top three of the field exclusive rate were KuGoo, QQ Music and Kuwo Music, all of them were under Tencent Music Group and the field exclusive rate of the first two both exceeded 30%. In 2014, KuGoo launched KuGoo 7.0 version, which simultaneously enabled three functions of listening to the music, watching MV and singing KTV and marked a new era of diversified services of digital music platforms in China. Based on diversified service functions and large user basis of over 200 million, KuGoo won the field exclusive rate of 38.9%.
Since the merge of digital music services of CMC and Tencent Group, products and brands such as KuGoo, QQ Music and Kuwo had maintained independent development. On December 26, Tencent released the email related to music business framework adjustment and senior management appointment and announced the establishment of several departments such as QQ Music Business Line Department, Copyright Management Department, Legal Management Department and HR Department, which was respectively for work of different directions. The QQ Music Business Line Department is responsible for R&D and operation of music products such as QQ Music and National Karaoke. Hu Min, CFO of Tencent Group, was appointed CFO of QQ Music. This quarter, Great changes continued in Alibaba Planet which had continuous personnel adjustments in previous quarter. It announced "Completely Stopping Music Services" on December 15, including functions such as adding to favorite, play list and local music services and was designed to be an entertainment interaction and transaction platforms for fans with contents such as fans community, schedules of stars, idol supporting tasks, benefits and peripherals and live broadcasting. On October 18, Baidu Music, which had been merged into Taihe Music Group for almost one year, for the first time disclosed its development path from "player tool" to "multi-functional platforms" and then to personalized, scene-based and intelligent "music mate" and the effort to establish the "Ear Economic Zone". The series of business adjustment and personnel appointments on one hand indicate the determination of industrial resource integration of each mobile music platforms and on the other revealed the industrial trend of the whole industrial chain layout.
According to the development course of China's digital music, the purchase rate of simple music form has been insufficient. To increase the willingness of purchase of the users, the complexity of music should be enhanced and connections should be intensified with industrial chain links such as musician services, music varieties and fans entertainment, which also means that music companies shall be more active to participate in the upstream and downstream industrial chain links and play a key role thereof. Analysys holds that, under the background of the increasingly intensive competition on music copyright resources, the mobile music platforms should make whole industrial chain layout as early as possible and seize first mover superiorities so as to obtain more superiorities in the post-copyright era featured by copyright competition and cooperation.
Analysys is a leading big data analysis company in the Chinese market. Since the establishment, Analysys has established the big data and analysis service ecological system cored by massive digital user assets and algorithm models. Analysys has been dedicated in providing product services such as digital user portraits and competition analysis and assisting in product operation for enterprises; and assisting enterprises in increasing revenues, saving expenditures, increasing effectiveness and evading risks by operation and management on digital user assets of the enterprises. The products in Analysys Family include Analysys Qianfan, Analysys Fangzhou, Analysys Wanxiang and Analysys Boyue. By December 31, 2016, Analysys had covered 1.51 billion intelligent terminals and monitored over 1.56 million mobile APPs.
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