The Profit Pattern and Financial Impact of NetEase Cloud Music's Marketing Strategy

Abstract

With the rise of short video platforms and the onset of the post-copyright era, the digital music industry is undergoing significant transformations. The competition within the industry has intensified, while user growth and conversion to paying users have encountered obstacles. As a leader in China's digital music industry, it is worth exploring how to overcome these challenges and identify new areas for growth. This paper employs literature research, case analysis, data analysis, and other research methods. Firstly, it analyzes NetEase Cloud Music's profit model based on subscription payments, advertising revenue, and sales of virtual items outlined in its prospectus. Secondly, it utilizes authoritative industry research reports to analyze NetEase Cloud Music's user positioning, consumer profile, and partnerships, simultaneously examining their marketing strategy through a case study involving Hangzhou Metro's collaboration with NetEase Cloud Music, known as "Reviews Train." By analyzing structural changes in financial data disclosed in annual performance announcements, this paper examines the impact of marketing strategies on revenue growth, cost control measures, and profitability, as well as explores how adopting diversified market strategies can enhance risk management capabilities and improve financial stability. Finally, this paper presents corresponding countermeasures and suggestions based on identified issues from previous analyses along with future prospects.