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NetEase’s music business lists on the Hong Kong Stock Exchange

By | Published on Thursday 2 December 2021

NetEase Cloud Music

The music division of Chinese web giant NetEase has listed on the Hong Kong Stock Exchange as a standalone business.

The Initial Public Offering of NetEase Cloud Music operator Cloud Village Inc was first announced back in May, but it was then delayed amid a crackdown by Chinese regulators, which have been scrutinising the operations of China’s tech companies much more rigorously of late.

But then, last month, a regulatory filing confirmed that the IPO would now go ahead, with Cloud Village Inc due to list today. That filing set a target in terms of the monies to be raised via the IPO of $500 million, which was down on what was originally anticipated. And in the end the IPO netted $421 million.

Reuters reported this morning: “Cloud Village raised $421 million in its initial public offering, with its shares priced at HK$205 each in one of Hong Kong’s first major tech listings since mid-year. NetEase sold sixteen million shares in the IPO, but the final price set was set only at the mid point of the range, indicating the deal was not swamped by demand”.

As Cloud Village listed, the founder and CEO of NetEase, William Ding, issued an open letter in which he told the story of his company’s music service to date, while also looking ahead to where it might go next. Looking back, he focused on NetEase Cloud Music’s recommendation tools, social features and its community of independent creators. As for the future, he talked about more diversity of content, more participation from users, and more support for music-makers.

“What will NetEase Cloud Music become in the future?”, he said “It’s going to be an audio-centric universe, in my view. Audio-based content is becoming ever more diverse: music, podcasts, live streaming, karaoke, audio theatre, radio – to name a few – creating multifaceted experiences and scenarios. Everyone can find a welcoming shelter of solace for his or her soul in this audio-centric universe”.

“In the future, our Cloud Village will encompass more enticing content, functions and capabilities”, he went on, “converting more basic users into active participants and creators. In the past, you might have just used our platform to listen to music created by others. In the future, you will be leaving more creative footprints of your own. Each one of your creative inputs, small or big, will help us further enhance our community bond and strengthen that intimate connection between our villagers, making NetEase Cloud Music the most engaging, interactive community in music”.

And as for supporting artists, he added: “NetEase Cloud Music is committed to investing in our support of independent artists. For those who pursue music as your dream, we hope that you no longer need to worry about the right stage for your talent and passion, and that your family and friends no longer need to worry about you financially. We hope you will see a music industry that is moving toward improving quality, rising standard and evolving tastes, where we will continue to be a driving force behind these positive changes”.

Some of that echos the sort stuff that Spotify boss Daniel Ek is prone to say about his vision for the future, of course, although the Chinese streaming services are different in a number of ways to the global platforms, especially when it comes to the way users interact with the services and more actively participate in music recommendations and discovery. Which means that any developments at companies like NetEase Cloud Music are definitely interesting to watch.