HANGZHOU, China, Feb. 23,
2023 /PRNewswire/ -- Cloud Music Inc. (HKEX:
9899, "NetEase Cloud Music" or the "Company"), a leading
interactive music streaming service provider in China, today announced its financial results
for the fiscal year 2022 ended December 31,
Summary of Key Financial and Operating Metrics
(RMB in thousands, unless otherwise stated)
Year ended 31
Loss before income
Loss for the
-Monthly paying users
-Monthly paying users
Fiscal Year 2022 Key Financial and Operating
- Revenue was RMB9.0
billion, an increase of 28.5% compared with RMB7.0 billion in 2021.
- Online music services:
-Revenue from online music
services was RMB3.7 billion, an
increase of 12.4% compared with RMB3.3
billion in 2021. The increase was primarily due to the
significant growth in revenues from sales of membership
-MAUs of online music services grew to 189.4 million from
182.6 million in 2021.
-Monthly paying users of online music services expanded to
38.3 million from 28.9 million in 2021. The increase was primarily
due to the continued efforts in improving user experience,
innovating interactive features and enriching the content
-Monthly ARPPU (average revenue per paying user) of online music
services was RMB6.6 compared with
RMB6.7 in 2021.
- Social entertainment services and others:
from social entertainment services and others was RMB5.3 billion, an increase of 42.8% from
RMB3.7 billion in 2021. Our vibrant community culture that encourages
content creation, as well as our diverse content offerings in
social entertainment formats, contributed to the robust growth of
our social entertainment business.
-Monthly paying users of social entertainment services
increased to 1,332.3 thousand from 683.3 thousand in 2021.
-Monthly ARPPU of social entertainment services was
RMB326.0 compared with RMB448.1 in 2021.
- Gross profit was RMB1,293.1
million, compared with a gross profit of RMB142.7 million in 2021, as a result of the
Company's significant revenue increase and control over content
licensing fees. Gross margin improved to 14.4% from 2.0% in
- Net loss was RMB0.2
billion, narrowed by 89.2% compared with RMB2.1 billion in 2021.
- Adjusted net loss was RMB0.1
billion, narrowed by 89.0% compared with RMB1.0 billion in 2021.
(1) Adjusted net
loss is defined as loss for the year adjusted by adding back
equity-settled share-based payments and changes in fair value of
convertible redeemable preferred shares.
Throughout 2022, we enhanced our music-inspired offerings. We
brought our users innovative features and expansive content, grew
our differentiated community and elevated our content ecosystem.
The success of these initiatives strengthened our commercialization
capabilities. Along with our optimized operating efficiency and
cost structure, we considerably narrowed our net loss in 2022
Despite the industry-wide slowdown, our MAUs of online music
services for 2022 still steadily climbed to 189.4 million, up 4%
year-over-year. The growth was supported by our continued effort to
create a better user experience and broader music listening
scenarios. Meanwhile, our DAU/MAU ratio (daily active user/monthly
active user ratio) stayed well above 30%, demonstrating our ability
to foster continued growth across our leading music-inspired
We continued to secure more high-quality content in 2022, with a
focus on better investment efficiency. Paired with our stronghold
in fostering a leading independent artists ecosystem and
enhancements to our in-house music production, we have developed a
comprehensive and differentiated content ecosystem that
encourages user stickiness, as well as users' willingness to
subscribe to our diverse premium offerings. We will further explore
cooperations with record labels to round out our content offerings
in 2023. A remarkable example is our recently announced partnership
with B'in Music, which expands our leading content library with
some of most influential C-pop music.
We have worked diligently to strengthen our monetisation
capabilities throughout 2022. Despite a more challenging
industry and macro environment, our total revenues in 2022 grew
28.5% year-over-year, led by increases across our
subscription-based memberships (via subscriber scale-up) and social
entertainment services. Our high-quality user community, ongoing
content enhancements, and innovative features supported the
increase of our paying ratio, which climbed to 20.2% in 2022, up
from 15.8% in 2021. Monthly ARPPU of online music services also
began to recover in the second half of 2022, aided by our pricing
optimization initiatives and broadened membership privileges.
We have also managed to considerably improve
profitability in 2022. The improvement is mainly attributable
to the effects of increased scale and cost optimization. Gross
margin soared to 14.4% in 2022, compared with 2.0% in 2021,
owing to our increased business scale and copyright cost structure
optimization as the industry tailwinds featuring more reasonable
copyright fees and payment settlement mechanisms. Our adjusted
net loss considerably narrowed to RMB0.1
billion in 2022, compared with RMB1.0
billion in 2021, further aided by disciplined cost
management and improved operating leverage. We achieved positive
operating cash inflow in 2022, compared with operating cash outflow
in 2021, and we have maintained a healthy financial position with
ample cash balance by the year end.
In 2023, we remain committed to cultivating our community,
bringing more high-quality music to our users, further
strengthening our operating capabilities and improving
profitability. Our plans call to:
- foster our music-oriented community ecosystem and explore
innovations in social networking, via enhancements to our
comprehensive product offerings, embedded with more interactive
features and broadened communicative ecology;
- further diversify and enhance our content offerings with better
efficiency. We plan to deepen our collaboration with copyright
holders, as well as strengthen our independent artists incubation
and our in-house music production;
- cultivate our users' willingness to pay and subscribe to
premium offerings, via improved user experience and deepened user
engagement, and broadened consumption scenarios;
- improve profitability through continued content cost
optimization, enhanced operating efficiency and disciplined cost
- look to IoT layouts, as well as potentially game-inspired
initiatives, to further expand music listening scenarios and
explore commercialization opportunities.
We offer a full spectrum of content as our young users' demands
become increasingly diverse and personalised. Our content library
comprised more than 116 million music tracks by the end of
December 2022, including music from
established labels, as well as independent artists and our in-
Partnerships with music labels. Music copyright licensing
has opened up following the end of the online music industry
monopoly. We continued to promote the reclaiming and expansion of
music copyright in a disciplined manner in 2022, and thus further
diversified and enriched our content offerings.
- Expansive catalogue of music labels. We have
signed copyright collaborations successively with top labels
including Linfair Records, SM Entertainment, TF Entertainment, YG
Entertainment, KAO!INC and Pony Canyon. These collaborations add
more popular music tracks from influential singers and groups to
our platform, including, but not limited to, Angela Chang, SUPER JUNIOR, Girls' Generation,
EXO, TFBOYS, BIGBANG, BLACKPINK and Kana
- Digital album. Several premium digital albums
achieved impressive sales on our platform in 2022, including
Hope" by Chenyu Hua,
"I NEVER DIE" and "I LOVE" by (G)I-DLE, "Teen on
Shuqian Street" by Lei Zhao and "Midnights (3am Edition)" by Taylor Swift.
Going forward, we will look to actively negotiate with multiple
copyright holders to secure more high-quality content that
complements our offerings.
- At the beginning of 2023, we successfully signed a copyright
collaboration agreement with B'in Music, adding its vast
music catalogue from top artists such as Jonathan Lee and
Independent artists. We continue to grow and empower
independent artists, serving more than 611,000 registered
independent artists by the end of 2022. Our content library
includes approximately 2.6 million music tracks generated by our
registered independent artists. Throughout 2022, we continued to
actively nurture independent artists, helping them create and
promote music works, and realise commercial value.
- Supporting musicians in content creation.
A variety of musical forces convene on our platform such as
lyricists, composers and arrangers. We have been effectively
facilitating music cooperation on our platform among musicians
across the creation value chain.
- Rolled out more creation-oriented communities
among musicians including Musicians Community (音乐人社区) and Backstage
Artists Forum (幕后专区): In doing so, we promote interaction and
cooperation among musicians, and better serve the music production
- Music knowledge sharing
(音乐说) is a special column
covering various aspects of artists' development, which offers
professional contents such as professionals interviews, industry
trend analysis and the exchange of ideas.
- Improving musicians' exposure. During the year,
we further mobilised our internal and external resources to help
musicians increase their exposure and promote their music
- Online exposure: Launched Independent Artist
Zone, comprising Original Music Discovery and Local Recommendation,
expanding music discovery and consumption scenarios, and kicking
off local-based operations for original music.
- Offline presence: Rolled out our
camping-themed music festival brand "Cloud Village Camping Music
Festival", incorporating an offline presence to promote our
- Helping musicians realise commercial value. We
take an active role in helping musicians profit on our platform by
leveraging our diversified commercialisation methods and tools.
- Launched Musical Work Trading
Platform: Musicians can realise commercial value through
trading and cooperating on music works with other professionals
across songwriting, mixing and arrangement, and other production
In-house music. In 2022, we further reinforced our
in-house production capabilities, focusing on our advantageous
music genres and styles. We were proud to cooperate with CCTV to
produce "Blooming Bauhinia"
(《紫荆花盛开》), a special
song dedicated to the 25th anniversary of Hong Kong's return to China. Additionally, our in-house studios have
successfully popularised a batch of hit songs, including
"Ta Zai Hu"
(《他在乎》), further demonstrating our excellent
in-house music content production capabilities.
Differentiated special planning episodes. Building upon
the highly engaged user interaction, we stimulated more IP-planning
projects to expand the exposure of elite music content. These
initiatives entail aesthetics appreciation of distinct content
offerings and the pursuit of passionate resonance, helping us cater
to music enthusiasts, as well as underpin our branding proposition
and user mindset.
- Following our partnership with major record labels, such as
Rock Records and Linfair Records, we rolled out special episodes to
revive classic songs and popularize them with the younger
- We helped expand the exposure of distinct music genres through
creative introductory episodes. For example, the episode titled
"100 Years History of Jazz
Music" received great user recognition.
- We rolled out more IP-themed special planning episodes to
promote in-house content via well-liked topics, such as "In the
Other Hometown," and utilize creative endeavours to increase
the exposure of lesser-known content, such as "The Land of
Silver Salt Photography."
Community ecosystem and product innovation
Throughout 2022, we continued to revitalise our differentiated
community across our steadily growing user scale, and achieved
strong and sustained user engagement levels. During the year, each
daily active user spent, on average, approximately 78.9 minutes per
day listening to music on our platform (2021: 78.2 minutes). As of
31 December 2022, 33.4% of music
streams were attributable to platform recommendations. These
metrics demonstrate the strong stickiness and activities of our
high-quality user group, and distinguish our vibrant community
attributes, which are mutually reinforcing within our
Meanwhile, we advanced our initiatives in product innovation. We
are not only committed to improving user music listening
experience, but also actively adding interactive features and
broadening communication scenarios, which invokes music-inspired
resonance and reinforces a multi-layered community ecology. We are
also broadening music listening scenarios, further aided by
collaborations with NetEase Games.
Optimising users' listening experience
- Memory Coordinates
newly launched feature presents users with recollections of their
own personal moments and emotional connections to the song by
displaying digitalised metrics of meaningful accompaniment.
- Style Recommendation
addition of this tab brings more personalised options to users in
the daily recommendation function to better reflect diverse tastes
with more accurate recommendation content.
- Music Encyclopedia
have rolled out the "Music Encyclopedia" function, integrating
fragmented information into an encyclopedia page that contains
music genre, style, instruments, BPM (beat count) and awards.
- Initiatives to improve audio
quality: Following our successful launch of
"Hi-Res," we further introduced "Dolby Atmos (杜比全景声)," which allows
users more authentic and immersive ways to elevate their listening
Fostering community atmosphere and social networking
- Launched innovative offerings, including Star-rated Comment
Section (星评馆) presented on our home page
to display emotionally touching comments, aiming to further boost
our community atmosphere and motivate creators to post high-quality
- Rolled out Fans Space (乐迷团),
an engaging and interactive gathering place for artists and their
followers to strengthen bonds and establish closer connections,
while encouraging user interactions to discover like-minded people
for more communication.
Expanding music consumption scenarios
- Joint collaboration with NetEase Games. We
continued to expand our internal collaboration with NetEase Games,
seeking more tie-ups that utilise our strength in content to
integrate users' gaming experience with diverse listening options,
across Ace Racer and
Minecraft, etc. , as well as the newly launched popular
casual game Eggy Party
- IoT layouts. Our foray in the IoT market covers
smart devices across more aspects of people's lives, around travel, gatherings,
sports and more. In particular, we added TV terminal layouts,
extending to large-screen household scenarios, featuring
Atmosphere Space (氛围空间),
a new immersive companion function with a variety of soothing
visuals and atmospheric sounds.
The Company's management will host an earnings conference call
at 7:00 p.m Beijing/Hong Kong Time
on Thursday, February 23, 2023
(6:00 a.m. U.S. Eastern Time).
Details for the conference call are as follows:
Event Title: Cloud Music Inc. Fiscal Year 2022 Earnings
All participants must use the link provided above to complete
the online registration process in advance of the conference call.
Upon registering, each participant will receive a set of dial-in
numbers, an event passcode, and a personal access PIN, which will
be used to join the conference call.
A replay of the call will be accessible by phone at the
following numbers and entering PIN: 10028650. The replay will be
available through March 2, 2023.
Additionally, a live and archived webcast of the conference call
will be available on the Company's investor relations website at
About Cloud Music Inc.
Launched in 2013 by NetEase, Inc. (NASDAQ: NTES; HKEX: 9999),
Cloud Music Inc. (HKEX: 9899) is a leading interactive music
streaming service provider in China. Dedicated to providing an elevated user
experience, Cloud Music Inc. provides precise, personalised
recommendations, promotes user interaction and creates a strong
social community. Its focus on discovering and promoting emerging
musicians has made the platform a destination of choice for
exploring new and independent music among music enthusiasts in
China. The platform has been
recognised as the most popular entertainment app among China's vibrant Generation Z community.
Please see http://ir.music.163.com/ for more
Forward Looking Statements
This press release contains forward-looking statements relating
to the business outlook, estimates of financial performance,
forecast business plans and growth strategies of the Company. These
forward-looking statements are based on information currently
available to the Company and are stated herein on the basis of the
outlook at the time of this press release. They are based on
certain expectations, assumptions and premises, some of which are
subjective or beyond our control. These forward-looking statements
may prove to be incorrect and may not be realised in the future.
Underlying these forward-looking statements are a lot of risks and
uncertainties. In light of the risks and uncertainties, the
inclusion of forward-looking statements in this press release
should not be regarded as representations by the Board or the
Company that the plans and objectives will be achieved, and
investors should not place undue reliance on such statements.
To supplement our consolidated results, which are prepared and
presented in accordance with International Financial Reporting
Standards ("IFRS"), our Company uses adjusted net loss as an
additional financial measure, which is not required by, or
presented in accordance with, IFRS. We believe that this measure
facilitates comparisons of operating performance from period to
period and company to company by eliminating the potential impact
of items that our management does not consider to be indicative of
our Group's operating performance, such as certain non-cash items.
The use of this non-IFRS measure has limitations as an analytical
tool, and shareholders and potential investors of our Company
should not consider them in isolation from, as a substitute for,
analysis of, or superior to, our Group's results of operations or
financial condition as reported under IFRS. In addition, this
non-IFRS financial measure may be defined differently from similar
terms used by other companies, and may not be comparable to other
similarly titled measures used by other companies. Our presentation
of this non-IFRS measure should not be construed as an implication
that our future results will be unaffected by unusual or
Cloud Music Inc.
SOURCE NetEase Cloud Music