Cloud village is the music streaming arm of the tech giant NetEase. The company’s music app is pushing ahead with an initial public offering in Hong Kong after reportedly delaying it earlier this year.
The tech giant originally filed for the listing of Cloud Village several months ago in August. Importantly, several reports at that time said NetEase delayed the IPO due to volatile markets. The company changed its position. This week, the company filed an updated prospectus with the Hong Kong Stock Exchange suggesting that it is going ahead with the listing.
China’s decision to approve a major data protection law in August affected Chinese technology stocks. The Personal Information Protection Law (PIPL) is quite interesting, to say the least. The PIPL lays out for the first time in the country’s history a comprehensive set of rules around data protection, processing and protection.
A major data protection law is not the only problem. Several months ago, regulators opened a cybersecurity review into a ride-hailing giant Didi. In 2021, regulators in China introduced anti-monopoly rules for the so-called platform economy. For instance, anti-monopoly rules bar companies from a range of behavior, including forcing merchants to choose between the country’s top internet players. Regulators also introduced regulations on unfair competition in the internet sector.
NetEase’s music app Cloud Village has 185 million monthly active users. It is in charge of NetEase’s music streaming business.
Its revenue for the nine months ended September 30 jumped 51.5% year-on-year to 5.1 billion yuan ($799.6 million). The main source of income for Cloud Village comes mainly from subscriptions and advertising. Cloud Village also makes money when users buy virtual items on its platforms.
Nonetheless, Cloud Village is still deeply unprofitable as it focuses on boosting user numbers and content. It has to compete with Tencent’s rival music streaming service.
Cloud Village’s customer base continues to grow, nevertheless, it may continue to incur gross and net losses. The tech giant’s music app explained why it is unable to generate revenue.
NetEase’s music app continues to invest in content, technologies, and research and development. In fact, it revealed many interesting details in a filing with the Hong Kong Stock Exchange.
Cloud Village’s parent company NetEase is one of the country’s gaming giants. The company wants to attract gamers from all over with world, through high-profile games inducing “Lord of the Rings.”
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