NetEase Cloud Music Subscription Revenue Pops 25.5% During the First Half of 2024

Photo Credit: NetEase Cloud Music

NetEase Cloud Music reports a 25.5% increase in music subscriptions during the first half of 2024, and a 26.6% increase in online music services Q2.China’s second-largest music streaming service company, Cloud Music, reported 2.6 billion Chinese yuan ($359 million) from online music services, up from 2 billion yuan in the same quarter last year. Out of that, 2.1 billion yuan ($289.9 million) came from sales of music subscriptions, a 25.5% year-over-year increase, driven by an increase in subscribers.

The company, formerly known as NetEase Cloud Music, did not disclose the number of paying subscribers or monthly active users (MAUs) in its mid-year earnings report, breaking with its previous tradition.

“Our total user base remained largely stable, with a DAU/MAU ratio (daily active user/monthly active user) consistently staying above 30%,” reports Cloud Music. “We continued to propel quality development across our music-centric ecosystem, strengthening our music-centric monetization, resulting in improved profitability.”“We have made online music membership benefits more accessible by offering special promotions for student subscribers and graduation special activities,” said Cloud Music Investor Relations Director Angela Xu during the company’s earnings call. “We are confident that by increasing the number of users enjoying premium privileges on our platform, especially younger generation users, we can attract more high-quality active and paying users, driving long-term growth in scale and commercial development.”

At the end of 2023, Cloud Music reported 44.12 million paying subscribers, a 15.3% year-over-year increase. That number places it behind its main rival, Tencent Music Entertainment, which reported 106.7 million paying subscribers at the end of the year, and 117 million paying subscribers in the second quarter of 2024.

Cloud Music revenue was at 4.1 billion yuan ($566.1 million), a 4.1% year-over-year increase, which was held back by a decrease in its social entertainment services division. There, revenue fell 21% year-over-year to 1.5 billion yuan.

The decrease in social entertainment income is similar to that of its rival, Tencent, following a crackdown by the Chinese government on online gambling last year.