Value Crea)on Gary Chen www.top100.cn 巨鲸音乐网 [email protected] What is Wrong? 眼前的问题太多 无法解决 可总是没什么机会 是更大的问题 - 《解决》 崔健 • Pay Model • Free Model iTunes 苹果(2003) Napster(1999) Amazon 亚马逊 BT Yahoo Music 雅虎 Spiralfrog MicrosoI Zune 微软 Qtrax Urge 微软+MTV iMeem Top100.cn巨鲸音乐 Last.FM Aigo 爱国者 Pandora A8 Myspace 9sky 九天 Spofy Nokia Music Store 诺基亚 Youtube Motomusic 摩托罗拉 Baidu 百度 Sina Music 新浪 Google+Top100.cn Case Study – Why Ad model in China? Legal-Ad supported free premier contents will be the fastest growing business online in next five years worldwide. 2008 facts in China(source: iResearch) • 200million vs. 1million. Over 200milion online users download and stream music for free in China. Total legal pay download market size is less than 5 million download for all legal music sites in China for year 2008. • 99.99% vs. 0.01%. Baidu dominates online music market share 90% with over 10billion download and streaming annually. Search and download is the main user online music consump)on behavior in China. Legit online music market share is less than 0.01% and s)ll decreasing. • RMB18billion vs. 5million. Online adver)sing spending increased 75% to RMB18billion in year 2008 in China. Baidu ad revenue surpassed Sina to become No.1 in China. Music contributes at least 20% of the traffic and media value to search companies. All legal music download sites combined generated less than RMB5million in total revenue for year 2008. • 50%. Online adver)sing spending will con)nue to grow rapidly in China in next five years with growth rate es)mated at least 50% annually. It is projected that in year 2011, online Ad spending will reach RMB37billion. Search Ad spending will reach RMB13.3billion in China. 2007 facts in world(source: IFPI report and Google SEC filing) • US$14billion vs. US$3billion. Google generated US$14billion Ad revenue in 2007. iTunes store generated US$3billion for five years total. Online adver)sing is increasing. iTunes sales is leveling off. Yahoo Music, Real, Napster and other pay subscrip)on services never grew to a cri)cal mass and big market share. • 95% vs. 5%. 95% of online users in the States and Europe download music for free from illegal sites while only 5% of online users use legal pay services. What a difference a day makes? -To Users • Bejer music search and discovery language barrier audio search • Easy to find favorite ar)sts reliable info. • One stop music life service • Personal Apps and SNS – playlist/online radio/podcast/client end/widget • Free and Freedom • Useful adver)sing or cool relevant Ads users may like to watch and use To Music Company You may say I am a dreamer But I am not the only one <<Imagine>> John Lennon • Create more digital assets and media proper)es. Catalogue – long tail Music video and marke)ng materials(cavi.tv) “Official” Ar)st page and mini-site New digital assets(virtualgreets, ar)st virture character) • Help to build new eco-system and billion dollar business to mone)ze huge online free music usage. • Build online store front to help music company to upsell and help to increase legit music market share in CD and mobile music. To adver)sers and marketers • Three in one media – download/streaming + online radio + MTV • Crea)ve Ad products Relevant and cool video Ads (muted of course, MTV, WMP) Synchronized Audio Ads (inserted in playlist/online radio/podcast) • Results-oriented Ads CPS/CPA Coupon Ads/Classified Ads/eDM • Reliable and trustworth Ad plaporms for big and small adver)ser • Integrated marke)ng solu)on online + offline + tradi)onal media Top100 Co. working with music industry provide legal ad-supported free streaming and download. It is building channel partnership to gain more users. Various channel partners have various user experience, Google Music applica)ons and tools. They will link their user request to Top100 for music usage. Top100 will generate ad revenue s and share with channels. Top100.cn Top 100 Co.: Legimate Music 22 billion songs Database and consumpon service, 95% per year by MSN Robot global Chinese People copyrights FlashGet There are over 7000 sites in China which directly or indirectly provides illegal music service. Future Mature Distributors… Future Immature Distributors… For those immature companies, such as any small music website, Top100 can also By recrui)ng more help them to join the Google adver)sement network, sharing the advantage of scale Distributors, expect effect. traffic CAGR as 300% The Music Na)on – Online Products and Services Revenue Streams User Base 1 Free Download/ AD（CPM+CPC+CPA） 300M Streaming 2 Playlist//Online Radio/Podcast AD（CPM+CPC+Audio 20M Ads） 3 MTV（1.0+2.0) AD 10M 4 Music Community/SNS AD（CPA+CPS） 100M 5 Link/One Stop Music Upsell AD+Link Referral Fees 30M （CRBT、CD、Ticket、 Merchandise） 6 Apps（Player+Client+Widget AD 300M +SNS） The Music Na)on – Mobile Mobile Music Products and Services Revenue User Base Streams 1 Pre-Install：Client DL AD 200M +Service (Android+Device) Streaming AD 200M Wi-Fi CRBT PAY 300M True Tune AD 100M SNS AD 50M Mobile Radio AD 20M （1.0+2.0) MTV AD 5M 2 Mobile Internet + App Subscription PAY 20M Store 3G What a Wonderful World – Digital Music Anywhere Products and Services Revenue User Value Streams Base Chain 1 To Home Stereo System：Broadband Subscriber Ad 100M +P2P Client 2 VIP Home Services: Subscription 10M Hardware Lossless Files + Karaoke + Members benefits +Software+ Service 3 Digital Background Music（B2B）： Subscription 1M Hardware KFC 2700 stores in China + Ad +Software+ 940M visit/ per year Service 4 To Auto Subscription 50M Hardware +Software +Service 5 Music Games + Music Education For Pay+Ad 50M Hardware +Software+ Service.