Analysis of NetEase Cloud Music

Group menber: Zhang Xuanting\Lun Lixin\Sun li\Chen Ye\Yu yun

T

W

O

SWOT• Limited copyright of

music• Needs of internet

flow

• Personalized recommendation

• Active community-user stickness

• Too many similar competitors in China

• Privacy issue

• More and more people are willing to pay for copyright of music

S

S

• Provide personalized recommendation to users

• Create a sense of community for users and thus improve their stickness to the Netease Cloud Music

W

• Nowadays, all the music applications in China strive for the music resources, and as for Netease Cloud Music, it just has limited copyright of music.

• Many services of the music platform rely on the internet flow. This technical requirement also leads to the weakness.

O• It focuses on the freemium

model, and now more and more people are willing to pay for copyright of music, which means its profit pattern becomes much more mature.

T• Fierce competitions of the music

marketThere are too many similar

competitors in China, such as QQmusic, Kugou, KooWo and Xiami.

• Privacy issueIt has connection with social

platforms, thus some information of users may be exposed.

Porter’s Five Forces

• The time and cost of entering this market is relatively high because most of Chinese music’s copyright has been bought by the big music APPs, and these APPs, including QQ Music, Kugou Music and NetEase Cloud Music, have taken a large market share. It would be quite hard for a new entry to challenge the habit of use.

Porter’s Five Forces

• There are quite a large number of competitors in this market, and users mainly focusing on the resources, have weak loyalty to the APPs. The switching cost is mainly about money and time due to the prepaid subscription fee and re-download process.

Porter’s Five Forces

• The number of users are large. There are two types of price sensitivity of music APPs. Users are more sensitive to monthly member fee and less sensitive towards the price of digital albums or songs.

Porter’s Five Forces

• The specialty of NetEase is its user community, users left lots of comments and stories related to the songs on it and this function is outstanding than other APPs. However, as long as the users cannot find the songs they want to listen to, they switch to other APPs which have those songs easily.

Porter’s Five Forces

• It cooperates with a lot of famous music providers and has some unique resources such as The Voice of China and Singer.

The Bussiness Model Canvas

Blue Ocean Strategy ——ERRC Four Actions Framework

Sound effect SubscriptionRanking list UI design Personalized recommendation Community

NetEase MusicKugou Music

Low

High

ERRC Grid

ERRC

Reduce NetEase reduce the emphasis on ranking

lists Kugou: Ranking lists of top music (Areas,

popularity, languages)

Raise Subscription UI design Personalized recommendation of song

menu

NetEase eliminate the function of sound effects

Kugou pays much attention. Eg. 人声，低音， HIFI ，丽音 , 3D (similar to filters)

High quality user community (Sharing, comments, exploring)

Eliminate

Create

Thank you