Liu Xiaosong: A8 Music transition pain and joy Layout mobile internet

8:30 A.M., Shenzhen Convention and Exhibition Center, 2013 China (Shenzhen) International Cultural Industry Expo opened. At the door of Gate 2nd, a booth, the music is full of movement, staff flurried busy, and the center of the stage, a suit of middle-aged man calmly looking at the screen on the wall. He is the "boss" of this booth, the Chairman of the Board of Directors of A8 Music Holdings Limited (hereinafter called A8 Music) Liu Xiaosong. The exhibition, A8 Music in sync to open its 2013 original Chinese pop music network competition.

A few minutes later, in a small corner behind the stage, "Global entrepreneur" reporter saw Liu Xiaosong. He was not in a very high mood and looked tired. The whole interview process was accompanied by noisy noises, and tired Liu Xiaosong had to raise his voice again and again to answer questions.

Correspondingly, as the first digital music company that landed in Hong Kong's capital market, A8 Music, which has been performing poorly for years, seems to have had to find a new business model in the current noisy digital music market.

This March, A8 Music released its 2012 annual earnings, the first loss. Data show that the group income of 345 million yuan, down 28.6% per cent, the company owner should account for the loss of about 29.9 million yuan, a year before the profit of 12.7 million yuan. After reviewing its earnings from the IPO, revenues and profits have been trending downward since 2010. In the annual report, A8 music is due to the decline of wireless value-added services and the continuous investment in mobile business.

"This is the A8 music must withstand the transformation of the pain, formerly to SP Business, now do not transition affirmation die, there is a glimmer of hope for transformation." "Zhang (a pseudonym) was an employee of A8 music, a few years ago from the SP gorgeous turned to an internet music company executives.

The advent of smartphones is a deadly blow to the traditional SP industry. The vicissitudes of the market urged Liu Xiaosong to "Get up early", and in the second year after the company went public, he began to make more efforts to layout the mobile Internet, while also consciously shutting down the traditional business. "Last year, all of the traditional SP business was stopped and a penny was not paid." Liu Xiaosong told global entrepreneur. Flipping through nearly two years of rhetoric, almost all talk about mobile internet.

He's a man who has made a contribution to China's wireless music and has always dreamed of music. Zhang the former boss and added, "In this line, there is no dream to play." ”

Prophet

Liu Xiaosong, once known as a "teenage genius", went to college at the age of 15 and later studied for a doctorate in Tsinghua University. The family originally hoped that he later became a scholar, but a summer vacation to Shenzhen to work, with the campus life intense contrast lets him resolutely terminate the doctoral study, enters the society.

1994, Deng Xiaoping "South Patrol" after the Shenzhen everywhere Gold, in a securities software company to work Liu Xiaosong eyes looking at the "bull" of the endless, smell the opportunity to start a business. Then he and his friends set up a company engaged in banking, securities computer software development and network system integration business, only two years, the company's revenue has exceeded 20 million.

By the end of 1996, Liu Xiaosong had accidentally come into contact with the investment. When the United States IDG Venture investment in Asia, Vice President Shong returned home, heard that year's students Liu Xiaosong has an independent business, they are ready to invest. But after the study, Shong abandoned the decision because he did not approve of the Liu Xiaosong company model. Money did not get, but Liu after the initiation of their own into the field of investment ideas, until today, investors are still another Liu Xiaosong identity.

In 1999, the global Internet industry continued to warm up, Liu Xiaosong decided to invest in the future of his famous Tencent. And such "foresight" does not seem to be accidental, because almost at the same time, Liu Xiaosong from the United States to realize that the next decade, the telecommunications company's traditional voice business will face enormous challenges, and the combination of Internet and mobile digital services will become a new profit growth point. This was "prophetic" around 2000.

"At that time the biggest feature of the Internet is CA authentication is very difficult, the computer front is not a personal, difficult to authenticate, and mobile phone is different, the characteristics are obvious, it is personal." Liu Xiaosong recalls. He opened the second venture, May 2000, A8 Music predecessor of the founding of the flying, the early days, the company mainly operating internet-based mobile phone PIM (personal information Management) business, became the country's earliest cooperation with China Mobile WAP website. But soon, a small advertisement changed the direction of the business of China flying. Liu Xiaosong in the local newspaper published an advertisement, said that on his mobile phone website can download ringtones, the results of the day download volume reached 280,000. "I didn't think it was entirely unexpected. He still remembers. In the mobile Internet is far from today's developed market environment, Liu Xiaosong "mobile + Internet" idea can only condescend to reality. 2004, Hua moving flying changed its name to A8 music, and set up the UGC model of the Internet original music platform, known as "Network Super Girl mode." Since then, around the music, through the upstream record companies, UGC platform and telecommunications operators (channels and payments), the entire chain of users, mobile value-added services to become A8 Music's main source of revenue.

The pain of transformation

Never thought, just four years after the 2008, SP industry decline has now. But A8 music, by virtue of its unique model and impressive performance, has been listed on the Hong Kong stock Exchange as the first mainland digital music concept unit. Liu Xiaosong did not explain why he chose to go public, but from a later point of view, the action seemed "premeditated".

Zhang analysis that the music market, although the copyright has not yet standardized, but still is a large company costs, at the same time to operators as the center, the bargaining power of enterprises is low, a large part of the profit by operators to take away. According to media reports, A8 Music has long been with Warner, Global, Sony and other first-class record companies signed to buy copyright, and the proportion of operators to 5:5. Operators have a firm grip on entrances and exits, A8 Music senior Vice president and executive director Lu Bin told Global entrepreneurs: "There was actually an operating model that sold music through operators." ”

The chaotic mobile value-added services market soon led to a crackdown by telecoms operators. A8 Music has also entered a decline in performance over the next few years. According to its earnings over the years, the first year after the listing of 2009, the annual business has also maintained a micro-increase, the turnover reached 707 million yuan, 2008, the data for 706 million yuan, 102 million yuan, a year-on-year increase of 27%. But into the 2010, the results turned downward, operating income fell 3.58% to 682 million Yuan Year-on-year, profits from the previous year's 102 million yuan sharply to 41.8 million yuan, 2011 years to maintain a downward trend, until last year, from the surplus to loss. It is accompanied by falling stock prices.

The transition seems imperative. As if in the Shenzhen Convention and Exhibition Center of Calm, in fact, Liu Xiaosong early plans.

One of the details is that A8 music came to market before and after the domestic also appeared a group of internet music Companies, the PC on the client and Web pages online music in endlessly. Although the same "mixed" music circle, but Liu Xiaosong adhere to the predictions of the year, mobile end is the future. Also in that year, Apple launched the iphone. Many people do not think that this product will trigger a revolution in global markets, including China. Then the strong admission of Android system, but also let mobile internet for a moment no two.

A look at the financing of A8 music and the movements that follow may be at a glance. HK $173 million financing, of which HK $48.5 million was used for potential acquisitions, HK $27.5 million for the development of the A8 music online system, and 20.8 million for 3G technology business integration.

Liu Xiaosong from his original dream is also more and more near, but this transition is bound to accompany the pain, in recent years, Liu Xiaosong consciously shut down including IVR (interactive voice response), some of the traditional SP business.

"We have to lose the baggage, the user value and the user experience of the business are stopped, a point not left." "Liu Xiaosong said," Bupobri. ”

is to move the Internet. As early as the first generation of smartphones, which contained the Symbian system on the market, Liu Xiaosong said he felt that the tide of mobile Internet was bound to come. Therefore, a listing, A8 music on the Symbian system based on the layout of mobile Internet, represented as A8box, a mobile internet music client products.

As early as the IPO, Liu Xiaosong has tried to develop mobile internet products in-house. According to an industry insider, A8 Music has developed a free mobile phone music player-happy to listen, but still continue to do the SP's thinking to do, not successful.

In the 2011, the iOS and Android Systems became the two main mobile phone systems, and Symbian became a chicken. A8 Music began to look for acquisitions in the marketplace. In 2011, it spent 19 million yuan to subscribe to more than 36.3934 million meters music, 2012, the additional 6 million dollars to invest more rice music. At the same time, Liu Xiaosong also focused on his personal investment in cool dog music, but ultimately because of the competition in the acquisition failed. During a small episode, after several rounds of negotiations, Cool dog founder Shei Zhenyu has agreed to the deal, but slept awake, told Liu Xiaosong, or decided not to sell.

Liu Xiaosong investors ' thinking continued to ferment, and then invested in an entrepreneurial team focused on mobile internet music jing.fm.

Income declines, investment increases, one minus one increase, A8 music pains unavoidably.

Move layout

Shi Jianping, founder and CEO of Dom Music, has been working with Liu Xiaosong for the second time. In 2007, he returned from abroad for nearly 20 years, and a chance to know Liu.

Shi Jianping, who worked in Oracle before returning home, was responsible for the marketing of mobile strategic products. He said that although he had been facing the B-side, he had been trying to better integrate the mobile Internet with consumers. Just met on the mobile internet planning for a long time Liu Xiaosong, talk about music, two people hit. Shi Jianping The post of A8 music CTO.

But two years later, he found that A8 mainly around the carrier system in the mobile Internet music products. "I want to have my own brand, I want to build a product system that comes directly to the user, [and A8 music] is different." Shi Jianping told global entrepreneur.

His "Runaway" was supported by Liu Xiaosong and gave a lot of advice. Shi Jianping and another founder founded the multi-meter music in 2009. "The team has been tossing over mobile internet products in the A8 music, and later found it is not working, so it's a good idea," said the person. Liu Xiaosong certainly supported it, and it was one of his layouts. ”

"From the very beginning it was purely targeted at the mobile Internet, and the concept of music cloud was first proposed." Shi Jianping said that, in addition to QQ music and thousands of listening, almost no enterprises to do so.

More than 2010 meters of music clients formally to the market, mainly rely on the Symbian system. "I didn't realize that Apple and Android were going to pull the whole mobile Internet so fast, we happened to catch up with this node," he said. "At the end of 2010, the multi-meter music Android version came online, and in early 2011 The iOS version then landed on the app store." According to Shi Jianping, as of the end of last year, three platforms already have 150 million user volume.

In the 2011, it seems logical that A8 music shares many meters of music, officially in the Mobile Internet music field plug in their own banner. Even if there is competition, Liu still praise Dom Music, "the team is very strong, the product is good, in the midst of so many giants, can stabilize themselves in the top four." ”

Dom Music has become the flagship product of A8 music in the mobile internet field. And the use of cloud technology, has long been in the field of multiple terminals to expand the territory. Through the multi-meter music app, you can make a smooth switch between mobile phone, pad and TV, and the user can build a song list. Shi Jianping said that as the industry changed, multi-meter music has gradually realized the new mode of entertainment +ugc+ social.

Liu Xiaosong and Shi Jianping both have persistent musical dreams, even in the face of insurmountable domestic user pay habits. Earlier this year, multi-meter music test water charges-monthly traffic. Shi Jianping said that the user's own choice, the opening of this service, can save a large part of their own flow package, if not open, for us, is still free. Digital music seems to be the same as Internet video, the copyright issue has been unavoidable, resulting in pressure on the industry to consider how to achieve positive cash flow. Mobile end of the advertising model seems to be out of line, users pay to become the main profit model to consider.

For A8 music, Liu Xiaosong seems to have a wider layout, through its Pine fund, has invested in many mobile gaming companies. He said that the future of the multi-meter music through the game flow will also be all the same.

In addition to the Jing.fm music occupation of the mass market, its investment is also cut into the small crowd. The product design concept is to find the music that you want to listen to by description, such as the input "happy" and other words that represent some mood and style, Jing.fm will automatically search for matching music.

Liu Xiaosong is building a huge mobile internet music empire outside of A8 's traditional music business. If the transition succeeds, he is now, pain and happy.