NetEase Cloud Music garnered $600 million investments from investors including Baidu and General Atlantic. The company maintained a majority share in the company after the deal.
NetEase's value is estimated to reach $1 billion last year as it raised 750 million RMB which was around $108 million during that time. Tencent, on the other end, is reportedly stalling as NetEase rise.
Tencent Music is a China-based streaming firm and live-music streaming apps developer that has around 800 million users. According to China's official stat keeper, the country has 800 million internet users. NetEase Cloud Music has been operating for five years and they are claiming that they are currently providing for 600 million users. According to the company, their users increased by 200 million since 2017.
With the new investments, NetEase said that they are planning to increase their users and in developing their platform that offers more or less 10 million songs. The company marketed independent music and it claims around 1.2 million songs from around 70, 000 independent music performers.
Last month, the Spotify supported Tencent, submitted their documents to market through a U.S. IPO which is expected to increase around $1 billion. The report of the Wall Street Journal stated that the process was halted due to unstable market conditions that indicates a drop in stocks that includes Tencent and Alibaba. Hopefully, Tencent's plan will resume this month but, currently, there was no update from the company.
Alibaba's Xiami music service is another strong contender as a music streaming platform in China. The company merged with Netease Cloud Music earlier this year as they plan to share libraries to increase both their song inventory.
It is believed that the union is a marketing strategy to increase their edge over their rival Tencent which operates with other music services including Q Music, Kugou, Kuwo Music and WeSing.
According to an iResearch forecast cited by Netease, China's music spending is expected to triple from 2017 to 2023. The country's music industry is estimated to reach 376 billion RMB in total sales this 2018. Tencent Music's IPO increased the company's edge over their contenders. Its difference from other music platform is its profitability. Tencent Music markets virtual gifts to be sent to live music streamers and they are also offering premium memberships. Other music platforms rely on subscriptions as their source of revenue.
Reports, however, show that Tencent's revenue is inferior to that of Spotify that has grossed around $1.5 billion last quarter alone.
