Network music fees: Platform profit model is not clear

Absrtact: In the near period of time the network music charge question continues the hot discussion, in the music person Gao puts the July music market to be completely genuine, after the National Copyright Bureau deputy Director Shaohong last month in the Intellectual property Day also clearly stated that the network music charge is inevitable. Seems the network

In the near period of time the network music charge question continues the hot discussion, in the music person Gao puts the July music market to be completely genuine, after the National Copyright Bureau deputy Director Shaohong last month in the Intellectual property Day also clearly stated that the network music charge is inevitable. It seems that online music fees are close at hand, but the reporter survey found that in the profit model is not fully clear, the music platform is still pushing online music fees on the road to explore, charging is a trend but will not immediately take effect on the user.

-Latest developments

Online music pricing is a trend

Charges will not take effect immediately.

Vinchon is an Internet practitioner, he is on the road to commute and at night when reading a cell phone or computer to listen to music, every day to listen to songs in about 2 hours, almost all music from the Internet Free download. Vinchon also began to pay attention to the topic as the March Music Man Gao said that online music would be officially charged this July. In his opinion, can always be free of the best, but if you really charge to users, they will support the genuine, but hope that the lower the better, "the best monthly not more than 15 yuan."

About the charges, by the reporters know more than the current industry is actively promoting, but will not take effect immediately. "Don't say July this year, next July is not possible." "China audiovisual copyright Collective Management association Director, Bird Art CEO, famous producer Zhou Yaping told reporters. In fact, Gao also clarified afterwards, said before the speech is that the music copyright will formally to the legitimate, "As for the charges, it is the platform of their own business." Zhou Yaping said that at present the record company can reach a consistent solution, but with the channel side communication, both sides is a game process. "Each Internet platform business model is different, cannot advance quickly, need to running-in." ”

All parties are actively promoting

In fact, since 2002 when the network launched a music-sharing platform, the network music has become a common consumer "free Lunch"-users can download free of charge on the Internet, audition songs, and music royalties are from the channel side (music platform) to the content side (record company) to pay. The reporter learned that last November, the China Audiovisual Association record Working committee set up subordinate digital music development Working Group, United more than 80% major copyright companies, began to actively promote network music fees.

At the end of April, the Ministry of Culture released the "2012 China Network Music Market Annual Report" shows that, from the trend, this year's domestic network music market enterprise fee profit model will be launched. Since October 2012, digital music companies led by Baidu, Tencent, Cool dog, Dom and shrimp have launched the product integration and strategic layout with genuine pay music as the target, the report said.

"Like a duck swimming, the surface of water is very quiet, but actually do a lot of work below", when it comes to the network music charges difficult to promote, Shi Jianping music president of the analogy to reporters. "This is not a side of the reason, now everyone is still mutual understanding each other, looking for the most appropriate solution." Shi Jianping said that over the past year, the Internet music platform and the record company has communicated many times on the issue of charges, which is the most advanced year.

Cool Music Digital Music Department general manager Zeng also confirmed to the reporter, regarding the charge, the music platform and the copyright party did have the correlation discussion, but now does not have the conclusion. "The charge must be done together, if one does, it will die." "From the perspective of the Internet music platform, the main maintenance to the user's basic services is free, as for the charges, will not do, what aspects to do, there is no conclusion."

-Industry Status

The music platform is struggling

The profit pattern encounters the bottleneck

The 2012 China Network Music Market Annual report of the Ministry of Culture shows that the overall market size of China's network music in 2012 is 4.54 billion yuan (to network music service provider-music platform, content provider-record company total income), compared with 2011 's 2.78 billion yuan greatly increased. Despite the sharp increase in output, but compared to online video and other brother Industries, output is still too small, and a large part of the wireless music revenue from the telecom operators of the ring tone business, to the Internet platform is not a lot of opportunities.

"The main reason restricting the development of China's network music industry is the lack of good profit model, music writers can not enjoy the profits, music platform is not a good profit." "Wang Zi, assistant dean of the Institute of Cultural Industry at Peking University, said that video sites can be implanted into ads and advertisers are willing to spend a lot of money to buy them, but the digital music industry has a big disadvantage in advertising."

Cool Dog Music President Shei Zhenyu has quoted cool dog music data for related calculations, Every time a user tries to listen to a cool dog about the need to pay the copyright party 0.25 cents royalties, that is, thousands of trial to pay 2.5 yuan, plus the cost of bandwidth, every thousand try to listen to about 1.6 yuan, that is, the user every thousand try to listen, music sites need more than 4 yuan cost, but thousands of audition advertising revenue only about 1 yuan, through advertising to feed the music site, ultimately difficult Money。

Many platforms are still losing money

Facing the huge copyright pressure, the current domestic music platform in the business model is mainly dependent on the flow of cash, long period and passive. Revenue sources include advertising, game transport, online performance, such as value-added services, high quality version of the payment, as well as membership fees. However, due to the low conversion rate of digital music advertising, the copyright and operating costs make most music platform difficult to survive, or continue to be in a loss-dependent external investment, or rely on value-added services revenue balance.

In the case of Dom music, Shi Jianping told reporters that the DOM, which was on the line in 2010, was still not profitable, but only through commissioned development and "very occasional" ads on the client, some "small income". Shi Jianping points out, "is still the input phase, the focus is to improve the user experience." ”

And like cool, the dog has been "dozen" years of music platform, although very early embarked on a commercial model, but at present did not realize too much profit. At the end of last year, Cool Music CEO Thunder has publicly said that cool is at the break-even stage.

"Now the music platform is also very bitter, the annual cost of server bandwidth Tens, copyright is also tens, even if the annual advertising revenue reached 100 million yuan, also spent." Woothers, vice president of Cool Dog music, complained to reporters.

Trying to find a way to profit

Some industry analysts told reporters, although not clearly disclosed profitability, but the current QQ music should be the industry's only profitable digital music platform, its revenue mainly depends on business-to-business advertising revenue and the value-added services.

It is understood that 2007, QQ music will be upgraded to music VIP QQ music Green Diamond Noble, members of the price of 10 yuan/month. According to Analysys International 2012 China Mobile Music Industry Annual report, the current QQ music Green Drill user has reached 6 million.

In view of the current development of digital music platform, Shi Jianping pointed out that the platform themselves are trying to find a new profit model, in the protection of the basic user's rights and interests continue to try. In March this year, multi-meter and China Unicom jointly launched the Vaux Dommy "packet Flow Chang Listen" business, the rate of 8 yuan/month, designed to save users traffic, improve the music experience. Cool music also disclosed to reporters, will be on the line in May Lossless, high-quality music channels, channel operation will be a free initial mode, and the future will become a new direction of commercialization.

-Future prospects

The prospect of digital music market is huge

At least move tens of billions of cakes.

Although the current music platform is difficult to survive, but due to see the digital music market, there are still many internet giants announced to join. At the end of last year, Jingdong Mall low-key online digital music mall, the price does not exceed the traditional CD 1/3, a record of the cheapest 1.99 yuan, the most expensive about 19.9 yuan; In addition, Alibaba also announced the acquisition of the shrimp net, and in the internal structure of Alibaba integration to the Music Division; Recently, NetEase CEO Ding Lei also released the NetEase Cloud Music, the main song, social, big-name recommendations and music fingerprint and other music community functions.

After all, how much can the Internet music market change after the start of the fee? The 2012 report by the Ministry of Culture showed that the number of users in the online music market and the wireless music market reached 430 million and 750 million respectively by the end of 2012. Ai Media Consulting CEO Zhang told reporters, in the promotion of network music charges, if the price calculated according to 10 yuan per month, if only 10% of the monthly activity, these nearly 800 million of music consumers will be able to add a tens of billions of of the digital music market profits.

In addition to direct profits, Zhang that fees would lead to the standardization of the music industry. Really start to charge, similar to the current E-commerce site, since we all want to buy music products and services, consumers will be in the purchase by comparing prices, compare services, compare brands, compare the promotion of the choice of the most appropriate digital music platform. This can create new stimulation to the digital music platform, stimulate the platform to seek the differentiation in the market competition, unceasingly strengthens own product.

According to Woothers's estimate, the first year of content and channel will be able to achieve 10 billion revenue after the real start of the charge. And as users grow faster and more quickly, the popularity of home WiFi, the future income will be tens of billions of levels.

"Free + pay" trend

According to the reporter understand, the current digital music platform basically formed consensus, charging mode, will take a trial listen to free and download the mode of charge. "Base users are free and charge for high quality services for demanding users." Zeng told reporters.

As a "senior" paying user, the university graduate student Ruwenche has been using QQ music for 6 years. Usually nothing is on the computer when the music is on, sometimes the web version of QQ music, sometimes directly in the QQ space to listen. "Mainly QQ music support QQ space background playback, can and friends unlimited share songs, and the use is also convenient, want to download on the download, so continue to use now, Ruwenche told reporters, Green Diamond members have a concert ticket priority, she robbed two times, two have been smoked. It is understood that she has just renewed a year of membership, membership will last until 2014, "expired or continue to buy."

She is not a minority of the paid users of QQ music. "Charging users is a potential, at least we see the success of QQ music," Woothers. It is understood that the previous did not try to customer charges Baidu, cool dog, Dom and other music platform in 3 April to focus on the low-key introduction of VIP Member Services, watercress also launched music radio fee version of Watercress Fmpro, different platform pricing, the charge from 5 yuan per month to 10 yuan.

The largest physical record issued Shang foreign music enterprise propaganda director, the famous music critic Zou Sakura Analysis, the platform focused on the introduction of membership services is actually a transition mode, with the future market mature, free range will be less and less. "Music is not just a record, it is a song, it can also have a lot of extension, such as song Friends, interaction with the singer, to obtain signature CD and other exclusive activities."

Charging mode will be alienated

Industry insiders also pointed out that the digital music platform charging mode should not be single, but the price should be comparable. Shing told reporters that this free trial and download fees combined with the way is feasible. Fees, the digital music platform will be in most of the pricing mechanism to reach a unified, on a unified basis according to their actual situation to carry out differential charges. "To Jingdong Mall, YYQ, etc. have been in accordance with the single download, according to the number of downloads is a relatively good choice, according to research, in combination with foreign situation and local status quo, 1 yuan, 0.99 yuan Price will be more reasonable." ”

For the current mainstream music platform, on the mobile end of the layout may be more inclined to a monthly fee. It is understood that the current yyq to take the test + Free mode, similar to foreign itunes, cooperation on the music platform without prepaid copyright, the price by the record company or music people to determine the independent, backstage system transparent monitoring, according to sales, the two sides 37 divided into seven is the copyright party. Shing told reporters, the current yyq and Rolling Stone, Bing, sunny, Wanxiaoli, Su Yang, and not door, etc. to reach cooperation, responsible for online sales.

Wang Zi also believes that the charging model on different platforms are not the same. According to the download volume of music calculation, the more users can get a discount. It is suggested that according to different types of charges, the relevant charging policy should be set up, and the music of different levels can be used for different fees, so that the charges become sustainable. "Such as pop music can consider the price of 1 yuan per head, and symphony and other elements of music should be appropriate highs, make difference." ”

Although it is hoped to advance the charges this year, Woothers also has a lot of worries. She told reporters that the charges are easy, how to combat piracy after the charges, to prevent the loss of users, is worth exploring after the issue. In addition to the need to solve some technical problems such as piracy, anti-charges, and so on, after the introduction of the fee version, the use of the old version of the user should not be forced to upgrade, when the mandatory upgrade is worth thinking. "After all, forcing a user to upgrade a version is a particularly disruptive thing to the user experience."

-Industry Secrets

Whether the royalties are expensive

With the 2001 China's entry into WTO and the revision of the new copyright law in 2002, the awareness of copyright protection has greatly increased. At present the mainstream record company and the music platform, all through the copyright purchase way cooperates. As a purchaser, the music platform has always felt that the cost of paying tens royalties is too high, and on the record company side, the copyright revenue is seriously underestimated.

How to Trade Music copyright

According to Woothers, the current purchase of music copyright is divided into two categories, one is one-time buyout, the contract period is generally 1-3 years, the second is "Guaranteed + divided" mode, the two sides agreed in advance to guarantee the amount of money, according to the song listening to download the volume to be divided.

According to a person who declined to be named, the current coolness, cool dog, Dom, and most of the digital music platform is mainly the use of one-time buyout, which many meters, cool, cold dog a year of copyright spending almost 20 million or 30 million, Tencent, Baidu slightly higher, about 70 million or 80 million. Shi Jianping notes that the multi-meter music has not yet been profitable, but the royalties paid to record companies last year amounted to 20 million or 30 million, accounting for about 30%-40% of all costs, the company's biggest cost. "The two sides negotiate a price, first hand money, a one-time give you so much money, love how to use."

"Digital music platform and record companies in the settlement, Baidu did the best, according to the number of audition and download the number of two different calculation methods to calculate, not much to give or less." "The person said that the copyright transaction, the current sale of the entire music is the easiest to reach a consensus, the future should be slowly explore the use of a split-share model, agreed to the proportion."

How to price the copyright fee

According to the reporter understand, generally, the record company first quoted a price, the digital music platform will be based on the amount of music, the number of new songs in the contract period, the signing period of the newly signed singer, artist level, song popularity (on the platform to listen to the ratio) and other conditions for comprehensive evaluation, see whether the price is cost-effective Zhou Yaping said that in the field of Chinese music, more copyright, more active record companies are less than hundreds of studios and individuals, the number of large and small record companies of almost thousands of. Among them, Warner, Sony, the world's three major international record companies occupy a 60%-70% share of the Chinese music market, Hong Kong and Taiwan record companies accounted for about 10%, leaving about 20% of the mainland, so the cost of copyright, the three major international record labels are significantly higher than the domestic record companies. A person in the industry to reporters, such as Bird art, sea butterflies music, too good wheat and other domestic famous record companies, the annual Internet companies pay royalties in millions, and the three major international record companies from the digital music platform to obtain royalties in tens.

Still, in the record company's view, the current copyright income is seriously "underestimated." Sea Butterflies record CEO, China Audio and Video Association record Working committee Secretary-General LU pointed out that according to the amount of Baidu calculation, a song to listen to or download only a few, a penny is not, the price is very low, to want to exceed the minimum number of the need for a high amount of clicks to do. "At present, the copyright of the entire industry in a year from the Internet to get the copyright fee is about 100 million, very few." ”

The choir data also shows that in countries such as Japan and Korea, music copyright party can get about 90% of the income in the split, the European and American countries, the proportion of copyright in the record industry is also generally more than 70%, and the Chinese music copyright in the absolute right to speak of the major music websites or telecom operators, the proportion of only a poor 2%-3%.

What is the profit of selling copyright?

According to the 2012 data, the record company's performing arts accounted for about 40% of the record companies, the wireless divide accounted for 35%, and the copyright authorization accounted for 25%. Zhou Yaping points out that different types of record companies are not the same source of income, some are mainly performance, and some are mainly copyright management, specifically to the bird art, commercial performance and copyright licensing income of about half. Lu also pointed out that the sea Butterflies music income half by artists brokerage income, half by copyright, physical record sales income only a few percent, income can not rely on records.

Woothers said that the digital music era, the record company has also changed the business model, CD is only propaganda means rather than revenue sources, on the one hand, by the impact of the digital platform, physical record sales do not make money or even lose money, on the one hand, but also rely on the platform to promote the popularity of music Small record companies are also the album for free to promote the use of the platform, "The record company for the music platform is love and hate."