Winning the new financial era

Chapter 461 Streaming Media Resso
It is not the first time that the three major records have used music copyrights as capital for hooliganism.

Spotify, the world's largest music streaming platform, is called "Shengtian" or "Sound Potian" in Chinese.

The Swedish company has been sucked blood by the three major records.

Despite having 7000 million paying users, Soundwave is in dire financial shape, losing more than $10 billion in the past two years.

Why is this happening?

Because Sound Potian almost spends more than 85% of its income on music copyrights, even if its annual revenue reaches 50 billion US dollars, it still loses money.

In addition, Sound Potian also gave up part of the equity to the three major record companies.

Internally, we must accept the exploitation of these greedy people; externally, we must compete with rivals such as Apple Music and Amazon Musical.

Life was still tough.

But Zhang Yida would not sympathize with this company, because Shengpotian completed the share exchange with Penguin Music this month.

Sound Potian is valued at US$160 billion, and Penguin Music Group is valued at US$100 billion. The two parties exchanged several points of equity.

Penguin Music holds a 2.5% stake in Sound Potian, which holds a 9.1% stake in Penguin Music.

In addition, Li Jiacheng was also the earliest investor of Sound Potex, and its subsidiary Victoria Harbor Investment is the fifth largest shareholder of Sound Potex.

Zhang Yida was silent for a moment, and asked a very important question: "What about music copyrights in mainland China?"

This issue is very critical. The copyrights of the three major record companies in mainland China have all been authorized to Penguin, and even the distribution rights have been given to the latter.

Competitors such as NetEase Cloud Music, Taihe Music, and Ali Music still have to go to Penguin to get goods. These operations can only be said to be too coquettish.

In May, Universal Music opened copyright bidding, and Netease, Ahri, and Taihe Music under Qiandu all joined the competition.

The licensing fee has been rising all the way, from the initial three to forty million US dollars to the most intense US$4000 million in cash plus US$3.5 million in equity.

Penguin can stand out, not because of its bid.

Instead, it united a European family consortium with Universal Music's parent company, France's Vivendi, to propose a strategic investment invitation, so it was able to become the winner in this competition.

When it comes to money, Ali is not afraid of penguins at all.But Penguin has too many external tricks, so he can only admit it.

At that time, the Zhonghe Group was not strong enough and did not have its own music platform. Even if it joined the snatch, it would inevitably end in failure.

It's still easy for these companies that rely on copyrights and patents to make money. They make money while lying down, and the price increases for customers are higher than each other.Zhang Yida felt emotional.

However, the momentum of the three major records did not happen overnight.

Columbia Records, the predecessor of Sony Records, was established in 1890, Universal Music was established in 1912, and Warner Music was established in 1930.

It is all about a hundred years of accumulation that has accumulated so many singers and music copyrights.

In the middle, countless company changes of ownership, company crisis and so on occurred.

Ever since the rise of the Internet, due to the expansion of online distribution and rampant piracy, life in the record industry has been difficult. It can be called Wang Xiaoer's Chinese New Year, and every year is not as good as every year.

It wasn't until the rise of music streaming that life for record companies gradually improved.

Today, the three major labels earn almost twice as much revenue from music streaming as physical records.

As for EMI, it fell just before dawn.

In the 20s, EMI entered China, and also signed contracts with former superstars such as Zhou Xuan, Hu Die, Nie Er, and Xian Xinghai.

It is also a record company with a long history, but because of the ebb of the traditional record industry, in 2011 it sold the copyright department to Sony and the record department to Universal.

Grange, the CEO of Universal Music, looked as usual, he waved his hand and said: "We authorized the music copyright in mainland China to Penguin Music Group in May this year, and it will not expire until May 5.

Therefore, this can only be discussed with Penguin Music Group. "

Cooper, CEO of Warner Music, also said: "Warner Music gave Penguin the copyright in mainland China as early as 2014. After it expired this year, our two parties also renewed the contract, which will expire in three years."

Kazuo Hirai also nodded, "Sony signed a contract with Penguin last year, and it will not expire until 2019."

Zhang Yida heaved a long sigh, this is a hammer, the domestic music market will not be able to play within three years.

Seeing Zhang Yida's disappointment, Kazuo Hirai said with a smile: "Although there will be no copyright in mainland China in the short term, we still have global copyrights other than mainland China.

Mr. Zhang, our contracts with Soundwave, Apple Music, and Amazon Music are not exclusive rights.

Add Musical.ly, and there is absolutely no problem. "

"Okay, then let's talk about global copyrights other than mainland China."

Zhang Yida had no choice but to settle for the next best thing and solve the copyright issue of Musical.ly first.

"The quotation of 5 million US dollars is too high, and it does not include the mainland copyright, so it is not worth the price."

Cooper said with a smile: "Didn't we say that plan B is just a shareholding.

We all understand the valuation of the Internet primary market, and we can buy shares according to the pre-money valuation of US$633 billion.

For Zhonghe Group, firstly, it can solve the copyright issue, and secondly, it can push up the valuation. "

"That's right, this is a win-win solution!" Kazuo Hirai also interjected.

Zhang Yida shook his head, "Impossible, unless the three record companies extend the period of copyright authorization to 10 years."

"Year 10?"

Grange laughed angrily, "Three years is too long for us, let alone ten years."

"Mr. Zhang, Zuckerberg has talked with us several times. If Zhonghe Group is not willing to cooperate, some people are willing to cooperate with us."

Cooper’s words pointed directly at the challenges that Zhonghe Group will face, because Facebook and other companies are all sharpening their knives and aiming at short videos.

"I think our conditions are already very loose. I don't understand Mr. Zhang, why are you hesitating?"

Zhang Yida glanced at Kazuo Hirai, and replied, "The current valuation of Zhonghe Group is not mixed with any water, but the sky-high price of 5 million US dollars offered by the three major records is far from the actual value.

I also have a plan, the three of you can listen to it. "

The three wanted to refute Zhang Yida's words, but when they heard that there was a new plan, they didn't rush to speak, and planned to listen first before talking.

Zhang Yida compared five fingers, "Five years, I want the copyright for five years, and the other three record companies have to invest 2.5 million US dollars in Zhonghe Group.

At the same time, music copyright authorization also includes streaming media platforms. "

"Zhonghe Group is going to launch its own music streaming media?" Kazuo Hirai has a very keen sense of smell, and immediately heard something different.

And Cooper directly objected loudly: "This is impossible, absolutely impossible. Streaming media has always paid us copyright fees, and there has never been a precedent for us to pay."

Zhang Yida spread his hands, "Isn't the precedent created by humans?"

"I want to hear about Mr. Zhang's streaming plans."

Grange didn't object, but asked about streaming media.

He was rather curious about Zhang Yida, and thought he might as well hear about the plans of this young billionaire with a net worth of 700 billion U.S. dollars.

Maybe there will be some surprises?
Zhang Yida nodded slightly to him, feeling that this foreigner is not simple.

Kazuo Hirai and Cooper were also temporarily silent, and they both pretended to be listening attentively.

"Zhonghe Group will launch a new music streaming product outside of mainland China, called Resso.

In addition to providing the same music payment service and lyrics function as Spotify and Apple Music, it will also add social gameplay, encourage users to share lyrics with each other, and focus on music socialization.

Musical.ly will also integrate with Resso.

When users swipe to Musical.ly's short video, as long as they think the background music is good, they can jump to Resso to play the song online or download it offline.

How effective Musical.ly is in the promotion of music, and the three major records are also shareholders of Sound Potian, so there should be an intuitive feeling. "

The CEOs of the three major records were all silent. After thinking about it carefully, Musical.ly can indeed be used as a traffic portal, and then distribute traffic to music, long videos, and even games.

They have also heard about how the products of Zhonghe Group are operated in mainland China, and they can just follow the gourd.

"Sound Potian has 7000 million paid subscribers, and Apple Music has 3600 million paid subscribers. Is this product called Resso sure to beat them?" Kazuo Ida asked.

"Of course!"

Zhang Yida explained confidently: "In the short video field, looking at the world, who is still our opponent?"

"It's an exaggeration. Before Facebook, Youtube, and Sarabu launched their own short video products, Musical.ly was just ahead and had a first-mover advantage."

Zhang Yida looked at Cooper who refuted him, and said: "Being ahead is also leading, everyone think about the story of Facebook and Sharab.

Facebook has launched so many products of the same type, but has it killed Sarabu?

Sharab is still alive and kicking, with a market value of more than 200 billion US dollars. "

Cooper wanted to argue, but was stopped by Grange, who said, "OK, let's not discuss this for now."

He turned his head to look at Zhang Yida, a pair of cloudy blue eyes flashed shrewdness, "Mr. Zhang, we have no doubts about the strength of Zhonghe Group.

But to convince the three of us, we have to come up with something more powerful. "

Zhang Yida scolded the old fox in his heart, and said with a smile on his face: "Resso has become a holding subsidiary of Zhonghe Group, we only need 55% of the shares, and the other 45% will be shared by the three major record companies.

Resso will be listed independently in the future, and the three major record companies, as shareholders, will also enjoy generous returns. "

Grange smiled lightly and shook his head, "Mr. Zhang, we have heard enough entrepreneurial stories in Silicon Valley.

Resso doesn't even have a product now, so it's too far to go on the market.

Don't forget, there are still three big mountains lying in front of you, Shengpotian, Apple, and Amazon, each of which is not a kind person. "

"Then you don't have to worry, I naturally have a way to deal with them."

Cooper sneered, "Young man, you have to be responsible for talking big."

"Is it convincing enough for an Internet entrepreneur who has achieved assets of 700 billion U.S. dollars in four years and owns more than a dozen unicorn companies?"

Grange laughed, "Mr. Zhang, you are not as reserved as ordinary Chinese."

"If you have strength and confidence, why hide it?"

Grange pondered for a while, and asked, "What is the relationship between this Resso and Zhonghe Music?"

"It depends on the choice of the three major records and Penguin after the cooperation expires."

Grange nodded, "Okay, I see."

"Let me ask again, how many monthly active users does Zhonghe Group have in the short video field?"

"9 billion!"

Grange seemed to have discovered a new continent, and asked, "Is this true?"

"All the data can be found, I will not cheat on it!

Among them, there are more than 5 million in mainland China, and more than 3 million monthly active users overseas. "

Grange, Kazuo Ida, and Cooper looked at each other, and they all saw the shock in each other's eyes.

This should be the first company to reach hundreds of millions of active users in both the East and the West, which is a miracle!

And the number of active users has approached the one billion mark, breaking through and another world-class technology company was born.

The three of them digested for a while, and finally said that they need to think about it before replying.

　Thanks for the rewards of the past and the past, Nian Heyi!
　　
　
(End of this chapter)