Communication Author: Hu Bi, Effy Kang Editor: Luke Jun 23, 2022 03:35 PM (GMT+8)

The business of audio is often overlooked. However, NielsenIQ’s report draws attention to this changing and growing industry, with players like LIZHI showing a promising future.

Audio, music

Data monitoring and analysis firm NielsenIQ has released its latest report regarding China’s online audio-entertainment industry. Whether it is listening to radio on the way to work, before getting to bed or exercising, the so-called ‘ear economy’ has taken on an outsized influence in the daily lives of many people. The large demand helped push the market to reach a size of 280 million users in China. 

Today, the online audio-entertainment industry has developed into four major segments, including mobile audio platforms represented by LIZHI (Chinese: 荔枝), digital text-to-audio platforms such as IREADER (Chinese: 掌阅), online music platforms represented by QQ Music (Chinese: QQ音乐) and NetEase Cloud Music (Chinese: 网易云音乐) and knowledge service platforms like iGet (Chinese: 得到).

Besides, NielsenIQ points out that the core attribute of mobile audio platforms led by LIZHI lies in the element of accompany. It can harmoniously integrate into users' different life scenarios through the advantage of sound and accompany them at every fragmented point of time.

Consumers of these platforms show the characteristics of being highly educated, living in third-tier or below cities and young. For instance, more than 90% of LIZHI’s users are born after 1990. Besides, their career development is stable and promising, with an average monthly income of CNY 12,774 according to the report. The convenient and accompanying features of brought forth by the platform allow users to hear audio programs at different times and scenes to relax, improve themselves or even meet new friends.

Specifically, LIZHI addresses the aspect of accompaniment through social features. Its user-generated content (UGC) model allows creators to share and exchange their work in real-time, which results in a vibrant online community. The firm’s head of capital markets, Effy Kang, told EqualOcean that "the benefit of this type of model is that it allows LIZHI to retain current users while attracting new users to join the platform." Its success can be seen in the firm’s first-quarter results for 2022, which showed that average audio-entertainment mobile monthly active users (MAUs) increased by 11% to 9.14 million. 

Moreover, online audio platforms’ users have a high acceptance rate of advertising of 80%, which helped to accelerate the commercialization of audio media. More and more brands are willing to invest in audio for its sound value, communication value, crowd value, and scene value. For brand owners, they realized the importance of focusing on managing the brand equity of their sound and creating an exclusive auditory symbol. At the same time, online audio advertising is superior to traditional media in the effectiveness of brand communication and personalized precision marketing. Effy Kang also believes that there will be more diversified and innovative models of revenue generation, other than advertising, for mobile audio platforms in the future.

Given these commercial interests, mobile audio platforms are seeking to cash in. Effy Kang mentioned that key realization channels "include virtual rewards, direct adverting, subscription fees and content customization." Particularly, content customization advertisements are relatively less intrusive to users. They are not uniform in style, but are compatible with the content of the program and contain storytelling, making them more easily accepted by users.

Audio will definitely be of unique value. Its application will be seen in different consumption scenarios in the future as car play and Internet of Things (IoT) technologies advance. The future looks bright for LIZHI and other firms in China’s online audio-entertainment industry.