NetEase Cloud Music Tops 38.3 Million Paying Subscribers — Up 32.5% YoY

Photo Credit: NetEase Cloud Music

NetEase Cloud Music is continuing its explosive growth by adding nearly 10 million paying subscribers.

The company added 9.4 million paid users, growing from 28.9 million in 2021 to 38.3 million at the end of 2022. That’s a 32.5% increase year over year, showcasing the explosion of digital music streaming within China. NCM’s revenues from its online music services grew 12.4% YoY from RMB 3.3 billion ($455M) in 2021 to RMB 3.7 billion ($549M) in 2022. NCM attributes this growth in revenue from the sale of its membership subscriptions.

“In 2022, we achieved record financial results while enhancing our music inspired offerings and differentiated music ecosystem,” NetEase said during its investor call.

Total net revenues for cloud music in 2022 were RMB 9 billion ($1.2B), representing 29% growth year-over-year. Due to steady sales growth rate and an optimized cost structure, we continue to see strong gross margin expansion, which reached 14.4% for the year and 17.8% in Q4, up from just 2% and 4.1% respectively from the previous year.

NetEase Cloud Music revenue 2022 Photo Credit: NetEase Cloud Music

“The top ten best-selling digital albums of 2022 on NCM span diverse music categories including Chinese Pop, K-Pop, Western Pop, Chinese folk song and alternative rock, showcasing the personalized music taste of our young and diversified user base,” the company told investors.

“We launched Music Talk, an online column that allows musicians to exchange ideas on professional topics that help with creation. We also wrote our original music zone and the local music zone to help music lovers explore new music content and expand independent artist’s exposure. By the end of 2022, the number of registered independent artists on NCM platform has surpassed 600,000.”

“Our in-house music studios also made solid progress, popularizing a batch of hit songs including “Goodbye Monica,” and demonstrating our ability to produce excellent music content organically, and this is one of the many reasons that set our platform unique. Going forward, we will continue to prioritize product innovation and content creation to further grow our community.”