Application of music: hard to break profit trap into “spell dad” mode

the author: ZongXiuQian

took $10 million in funding to business, is to do electrical business application, or do social applications, or to do photo sharing application? Because if you take a fancy to music is a rigid demand of mobile Internet users, so as to select mobile music application startup this road, need to remind you that this is a “the road to the slavery.”

if do social applications, the cost will come from the human and basic hardware procurement, can be used to promote the rest of the money. But for music or content company, must first take out nearly half fee to pay copyright, from 10% to 20% of the second will also have to take out money to pay for large flow of music content. Storage problem also can’t be ignored, which need to purchase the equivalent of the same type business more than 4 to 5 times the number of servers.

in other words, when a startup entrepreneurs to use the same funds, seventy percent money may at startup has been consumed.

next, in to buy copyright – accept advertising – to buy copyright reciprocating cycle, cell phone music startups then entered the dance chain periods of struggle.

for mobile music application, this kind of situation in the past few years have early, just in this year’s situation has intensified its survival plight. Music copyright mess is still, no no signs of development in the direction of the specification; In the mobile Internet application all spell dad era, the Internet giant hold almost all top entry, effectively promote left free.

“music copyright fee up several times this year, is a former stage say music charge of this matter.” A mobile music application to tencent, head of the science and technology to complain, “music fee didn’t into it, but the copyright owners have rise in price.”

“you cash flow is nervous, especially only the client is not the PC mobile music application, many are seeking financing or seeking acquisitions.” The person said.

mobile music application can be divided into several categories: one kind is tencent, baidu and netease company Internet music applications to the mobile terminal; 2 it is cool, cool dog such as I entered the music industry earlier company do mobile music application; 3 it is dried shrimp, meters, ttpod etc pure mobile music application; Four is douban FM, Jing, listen radio application class.

many mobile music application starting this year into merger shuffle. Earlier this year, shrimp music has been alibaba to buy. Its A8 music was 360, but was A8 official denied the news immediately. A8’s m music workers more also denied the news of the takeover. “A8 and 360 messages can also be carried through 360 bounty, but is not sure at the moment.” According to people familiar with the matter.

“mobile music application without too much way, finally, only a few left, the other is likely to die. This several by user scale is large enough, advertising income is good enough, the side AD money, spending a huge sum of money to buy the copyright, earn price difference, “he said. Sing the CEO Chen said.

a buyout by Internet giant is almost the only way out. In the future, the ultimate state is mobile music application become a giant standard products, this sad. “Counting on these big companies on music disruptive innovation is impossible. Since there is no new independent startups to enter to the industry.” JingFM founder Kevin springer said.

copyright mess

in principle haven (copyright infringement – notices – delete) after failing in the field of music, search by users to upload or link to improve the library the way unable to solve the problem of update music library, music is the topic of the original. But that doesn’t mean rich enough to buy can solve the problem of copyright.

someone described, if a previous’t copyright class of entrepreneurs first venture to the video or music would be tantamount to suicide.

on copyright issues, compared to music copyright, a few years ago to blood relations each other video website can even be happy. Starting in 2009, after many times lead troops to battle phase, make all kinds of video website copyright alliance, outside to restrain price growth for copyright.

music copyright has not yet come to this, copyright company has gained the upper hand. But different types of companies say different.

from international companies such as warner, SONY holding more than 70% of the music copyright, near monopoly, does not want to sell, often on wild speculations, “want to give you give you, do not give you didn’t also the way”.

there are some big domestic companies like evergrande music, wonderful music, etc., usually signed big exclusive artist, price is different also, “some to give you some don’t give it to you.”

smaller domestic companies, signing singer is uneven, different charging standard. “Don’t look for him to music copyright will tell you.”

since like this, whether it is music competition between, or policy issues, music copyright has been toward the direction of the original, has been a mess, but lead to music startup of a lot of time spent on to buy the copyright. “I have 20 million can buy the copyright, for example, is not money can buy, a year to run on hundreds of copyright company a to talk, spend a lot of time cost, economic cost, can not talk about down.” A mobile phone music entrepreneurs say that.

“money to take the time to make, you have no money doesn’t buy copyright also not line, they will be trouble, let the music companies to pay or is losing money, even a lawsuit.”

profit difficult

pure player and music site actual role is copyright sales channels, reciprocating cycle between copyright and advertising. Spend money on copyright, user sell advertising – to make money and buy the copyright.

“can only make the copyright sources of income, not from the content production for extra income. This is why they are unlikely to do particularly big. If money will rise in the price of copyright, will remain in the edge of life and death. Music website and pure music player applications will tangle in the revenue growth and increase the price of the copyright, it’s hard to jump out.” Chen said.

Pandora application can be said to be more successful independent music company, has just been released second-quarter results show that the revenue by $101.3 million a year earlier rose 55% to $157.4 million, but the losses of $7.8 million, losses to expand by 44.4% over the previous year.

“copyright is a dynamic value. The higher the growth, copyright must be higher, this dilemma starts “. Kevin springer said.

in music downloads hopeless situation, the current Internet music platform to take AD + profit model of the game.

but will have verification on the Internet business model to the mobile terminal, entrepreneurs, still need to be careful: “the user does not lack of music client, if you add advertising or affect the user experience, user soon turned to other applications.”

another dimension, the Internet, YY, 9158 has been verified the show mode, fan economy is also a viable business model. Cool I music, cool dog adds to show model. Because of the inevitable homogeneity competition, show pattern from blue ocean into the red sea.

“between show rob poaching is also very strong, very competitive, dig to dig, is worth it, finally you don’t make money.” One industry source said.

Kevin springer thinks, the market is saturated, not suitable for the new company to enter again. Startup of 20 to 30 people, human is limited, have no energy to do this.

giant to buy

Internet giant in the PC will be music as the standard. Tencent QQ music in the music of standardized services, library building, build quality and user experience) has begun to take shape, through QQ user import and micro letter, weibo and other social networking platform sharing, green diamond pattern can be profitable samples of domestic digital music.

netease cloud music launched in April this year, the main social applications, through the way of big DJS and users to subscribe to drive the active community. But in some music practitioners point of view, this is just a stunt, cannot solve the problem of update mechanism and standardized service essence.

a: baidu has acquired a few years ago, such as application, launch baidu music after integration. This year, alibaba purchase music dried shrimp, shrimp music become a part of the alibaba music group.

“for Internet companies, a shortcut is accomplished by acquiring strategic layout of mobile music.” These people said.

but the pessimistic attitude that someone on the layout of the giant. “Mobile phone music player already has several early into, baidu and netease come in too late. Baidu music netease music just got up, the client has not. Baidu and netease is negligible in the mobile phone music, not too much of a market.” One industry source said.

but mobile music application and were large companies mergers and acquisitions opportunities, find their own “daddy” to survive.

mesh in front of the situation is, cool and cool my dog into the music field earlier, and there are games such as profit, there is no pressure to survive. Cool dog and 360 strategic coordination, 360 do support, traffic etc. Not a problem. Merlot time has the support of Taiwan KTV association, the backing music radio station have a listen to, also do not have too much pressure to survive. So count, the domestic independent status, yet no hold thigh do music application only Jing FM.

but Jing FM is also looking for the timing of the takeover and buyers. “Don’t reject the takeover, but I can choose. Hope that the takeover of Jing brand and style can be maintained.” Kevin springer said.

source: tencent technology