Wen | Blue Hole Business Qian Xinyao
Editor | Zhao Weiwei
In the long audio market, Tencent planned a "the glory of the king-style" battle.
In December 2020, Tencent launched "WeChat Listening to Books", which is a more subdivided vertical listening product under the WeChat business group. It can listen to books for 90 minutes for free every day. Like WeChat’s "video number" in 2020, WeChat listening to books also supports individuals to open "audio number".
According to the "the glory of the king" style of play, WeChat Listening to Books is responsible for attacking the "off-road". In the development road which is mostly a two-person line, the hero who assists it is the huge social traffic of WeChat. As a vertical subdivision of "WeChat reading", WeChat listening to books focuses on audio content such as audio novels, published books and podcasts.
Attacking the "ear economy" is not a new battlefield, and it is not Tencent’s first shot. Before "WeChat Listening to Books", Tencent launched Penguin FM, which belongs to the social network business group, as early as 2015, and then Tencent Music Entertainment Group (hereinafter referred to as "TME") launched "Cool I Listen" in 2020.
At this point, in the long audio battlefield, Tencent has assembled three teams: upper, middle and road, focusing on Penguin FM on the road, cool listening in the middle, and listening to books on WeChat on the road to assist the attack. However, in the long audio market, there are old players such as Himalayan and Litchi, and then there are new recruits such as ByteDance’s Tomato Listening Book and Netease Cloud Music.
Although one-on-one combat is not as good as a team battle, what is the odds of Tencent’s attack by the whole army?
Three-line attack
Listening to books on WeChat is undoubtedly a boundary extension of WeChat business group.
Wechat reading focuses on serious content, starting from the small market of WeChat users who prefer to read and publish books. As early as the 2.0 version of WeChat reading in 2017, the audio storytelling function has been realized. At that time, WeChat reading signed many famous writers and intellectuals to enrich the content ecology and reduce the time cost and threshold for users to read.
In order to expand the volume of users, Wechat Reading has gradually expanded its content boundaries to online literature, comics and WeChat WeChat official account articles to meet the reading needs of more users. This market positioning is in line with the advantages of WeChat’s acquaintance relationship chain, which helps users meet their reading needs and realize social fission.
According to the 2019 WeChat Reading Annual Data Report, there were 115 million reading users in 2019, and 475 million books were added to the shelves. In 2019, the per capita reading time of WeChat reading was 85.8 minutes/day, up 14% from 2018, and the per capita listening time was 142.2 minutes/day, up 39% from last year. The focus of WeChat reading is still on continuous customer acquisition and retention, so it is necessary to dig deep into user needs and increase user conversion and retention.
So far, the official data report of WeChat reading in 2020 has not been published, only the annual book list has been published, and users can also view personal reading reports, covering statistics such as personal reading time and total reading.
However, in 2020, WeChat reading added the paper book purchase function in version 5.0, launched WeChat listening to books, and will soon launch an ink screen reader in 2021. All these actions indicate that WeChat business group is beginning to dig deeper in reading consumer content scenes.
Even though WeChat Listening Books came out soon, judging from the download volume in the past 90 days in the seven wheat data, although WeChat Listening Books are far less than Himalayan, it has surpassed Penguin FM and Cool Me Listening with its traffic advantage, and is far higher than ByteDance’s tomato listening and other similar products.
In the previous long audio content market, Himalayan, Litchi and Dragonfly FM have occupied the mainstream market. In 2015, relying on the advantages of Tencent’s social network business group, Penguin FM began to provide free audio digital listening services such as listening to books and news, and opened up Tencent resources in one stop with diversified content modes to form a complete audio ecological chain of "UGC+PGC+ copyright".
Relying on the resource ecology of Tencent Music Entertainment Group, Cool Listen will focus on new exploration in the field of long audio in 2020. In the "the glory of the king" mobile game, the middle road is the shortest of the three lines, and team battles often occur here. Why can "Cool Me Listen" shoulder this heavy responsibility?
Cussion Pang, CEO of Tencent Music Entertainment Group, once said that long audio will be a strategic area that will continue to exert its strength in the future, and the group will accelerate the integration of music and audio to provide users with richer and higher-quality audio-visual content and product experience.
In Cool I Listen, there are not only the first exclusive radio drama Tomb Notes, but also many long audio products such as Wang Gang Telling Stories, which are all kinds of audio content, aiming at a younger market.
As the main force in the middle road, "Cool I Listen" has the ability of long-range attack. Cool listening is verifying two current internet trends: users pay for high-quality content to get more advanced audio-visual enjoyment, and the platform is making up for the shortcomings of the industrial chain through new exploration.
TME’s exploration in the field of long audio is even more traceable. Before the release of "Cool I Listen", TME’s QQ Music, Cool I Music and Cool Dog Music were all launched in the audio book area.
According to TME’s financial report in the third quarter of 2020, the average user duration of long audio has been continuously improved, and the number of paying users of long audio has further increased. Its MAU penetration rate has increased from 4.7% in the same period last year to 11.7%, while the financial report in the second quarter shows that its MAU penetration rate of long audio has increased to 9.4%.
The blood transfusion behind it
Behind Tencent’s listening products, there is a powerful content blood supply machine-Reading Group.
At the end of April 2020, Tencent took over the Reading Group as the largest shareholder. Wu Wenhui, the founder of Reading, retired and Cheng Wu became the new CEO. This move is considered by the outside world to further strengthen the linkage between Reading and Tencent’s internal ecology.
As disclosed by Tencent Music Entertainment Group in its financial report in 2020, TME has the right to adapt most of the audio works in the Top100 list of the most popular works of Reading Group. It is relying on the strategic cooperation with Yuewen Group and other leading online literature platforms in China that Tencent Music has realized the content play of "exclusive from the head to the full coverage as far as possible".
As the largest IP copyright library in China, Yuewen Group began to lay out audio services through the acquisition of "Tianfang Listening to Books" in 2010. In 2015, it made continuous strategic investment in Himalaya, the largest integrated audio online platform in China, and "Lazy Listening to Books", a vertical audio content platform for audio books, and launched paid services.
At the end of 2018, at the "Symbiosis and Content" sub-forum of Tencent Global Partner Conference, Reading Group released the audio reading brand "Reading and Listening to Books".
In addition to "supplying blood" to the content of third-party audio platforms such as Himalayan, lazy listening to books, Penguin FM, etc., the app "QQ Reading" and "Starting Reading" under Reading Text will be launched in 2016 and 2017 respectively, so reading text naturally needs to be convenient for its own channels. According to the "2018 Network Literature Development Report", 70% of the original content of domestic mainstream audio frequency channels comes from reading.
By analyzing the revenue of reading articles, it is found that it consists of two parts: online business income and copyright operation and other income from paid reading, online advertising and distribution of third-party games. With the rise of free reading in recent years, the development of reading has been impacted.
The financial report of Reading Group in the second quarter of 2020 released shortly after Tencent took over reading shows that the total reading income was 3.2 billion yuan, up 9.7% year-on-year, and the operating loss was 3.556 billion yuan, compared with the profit of 530 million yuan in the same period last year. This is the first loss in reading for many years.
For Tencent, what it cares about is not the income of reading the text itself, but the role it plays in Tencent’s "new cultural creation" ecology.
James Mitchell, Chairman of the Board of Directors of Reading Group, once said, "Reading is an important original IP source for Xinwen to create a big ecology", and what he expects more is that the new management can promote reading to be more closely connected with Tencent Xinwen to create a big ecology, "in film and television, animation, games and other content businesses."
Reading is the IP source of the "new cultural innovation" strategy for Tencent, while paying for reading is the maximization of IP value, and Tencent is more keen on the quick realization of the latter.
a race against time
It is undeniable that long audio has always been a narrow track.
Based on the Research Report on the Development of Network Audiovisual in China released in 2019 and 2020, the network audio market is stable, with the highest penetration rate of Himalayan users, followed by litchi and dragonfly FM, and the third echelon includes niche platforms such as Penguin FM.
In addition, the number of online audio users exceeded 300 million in 2019, but the number of users in 2020 was 275 million, which showed a downward trend in the total number of netizens.
What is even more worrying is that in the long audio market, the head players of "three points in the world" are still in a state of perennial loss.
For Himalaya, which has repeatedly heard rumors of listing, some investors once told Caixin, "From the earliest plan to go public in 2018 to now, the listing time has been delayed, and at present, Himalaya has not found a suitable business model, and we are not sure whether it can successfully complete the IPO this time."
At the beginning of 2020, Litchi was listed on NASDAQ as the first audio stock in China, but since then, its share price has been falling from $500 million to $180 million. Even if it made its first profit in the third quarter of 2020 and launched a new product, Litchi Podcast, it will have limited effect on the stock price.
Old players’ problems remain to be solved, and new players begin to flood in.
In June 2020, ByteDance launched an App called "Tomato Listening" and entered the director’s audio market; On September 8, 2020, Netease Cloud Music launched a new content section "Theatre of Sound" and continued to increase the audio market. In this context, the current ear economy looks like a "capital besieged city".
In any case, Tencent is a new generation of listening products. Wechat listening to books is to Wechat reading, and cool listening to books is to TME. These new generation of listening products all belong to the product content branches under different business groups, each in a subdivided track station.
The author found that the high-ranking programs in the WeChat listening book, such as Xiao Yearbook, Jiang Xun’s Youth Edition of Dream of Red Mansions, and Feng Tang’s Method of Getting Things Done, all came from Dragonfly FM, and Tsinghua Han Xiuyun’s Talk on Economy was the same as that in Himalaya.
The new generation of listening products is not completely different from the previous generation in content. They urgently need to obtain high-quality content that has been verified from the previous generation of listening products, and at the same time, they should build their own personalized content system.
Compared with the old players, the new players are more looking for a new mode of audio book product experience. For example, the highlight of WeChat listening to books is that it supports individuals to open audio numbers, which is a logic with WeChat’s current video number: occupying traffic portals and making attention a monetization tool.
Will the long audio market be broadened by the new generation of listening products?
This is obviously not a problem that can be solved in a short time. For Tencent, it is a time race within Tencent that who can promote the success of the listening products of the three major departments.
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