Caixin
Jan 06, 2021 08:08 PM
BUSINESS & TECH

Music Stops for Alibaba’s Xiami Streaming Service

Xiami appeared to lose touch with its users as the competition for music streaming rights grew fierce.
Xiami appeared to lose touch with its users as the competition for music streaming rights grew fierce.

Alibaba Group Holding Ltd. will shut down its 12-year-old music streaming service next month as Xiami Music had trouble securing the copyrights to keep users interested.

Xiami Music will stop all streaming and other services on Feb. 5 and shut down its servers a month later, it announced (link in Chinese) Tuesday on social media. The reason it gave for the shutdown was “adjustments of business development.”

The closure marks a failure in Alibaba’s attempt to expand into music streaming, though industry observers saw it coming after the e-commerce giant and Alibaba-founder Jack Ma’s private equity fund Yunfeng agreed in September 2019 to invest $700 million in one of Xiami’s rivals, NetEase Cloud Music.

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Xiami Music has long lagged far behind the top trio in China’s music streaming industry — Tencent’s QQ Music, Kugou Music and Kuwo Music. In October, the three topped the charts in monthly active users, with QQ Music streaming to more than 200 million monthly active users, according to data compiled by market research consultancy Qianzhan. By comparison, Xiami Music had about 22.4 million monthly active users.

Alibaba acquired the then-5-year-old Xiami Music in 2013. Two years later, Alibaba formed a new music division, Ali Music Group, to integrate the music apps of Xiami and Tiantian, which Alibaba also acquired in 2013. The tech giant named renowned musician Gao Xiaosong as Ali Music’s chairman and veteran music industry executive Song Ke as CEO. It also brought in popular TV host He Jiong to serve as chief content officer of the music division.

However, Xiami appeared to lose touch with its users as the competition for music streaming rights grew fierce.

In the highly concentrated world of music licensing, the ability of streaming services to obtain a wide variety of music from the world’s top record labels can make or break them.

QQ Music, for example, has obtained copyrights from labels such as Sony, Universal, Warner and Emperor Entertainment. NetEase Cloud Music, for its part, has reached agreements with Studio Ghibli, Rock Records, Warner and BMG. It was also authorized to stream music from popular Chinese TV shows such as “Singer” and “The Rap of China 2020.”

Contact reporter Timmy Shen (hongmingshen@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)

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