Photo/Shetuwang

Nov. 5 (NBD) -- How to make audio products more affordable and widely available to users remains a major challenge to the audio industry, said Lai Yilong, CEO of online audio platform Lizhi at the 2018 Guangdong Internet Conference.

The industry is shifting its development focus from pure paid knowledge to a wider range of paid contents.

Declining interests in paid knowledge

It is noted that music-streaming leader Tencent Music filed for U.S. IPO in early October. According to its prospectus, it has 800 million monthly active users. However, only 3.6 percent of its users pay for music, reflecting that online users' willingness to pay is low on the whole.

In addition, users have become more capable in screening paid knowledge products, according to a report released by research firm iResearch. At present, the repurchase rate of products offered by premium content providers is only 30 percent. It is evident that users are losing interests in paid knowledge products.

Most paid knowledge platforms are simply managing to deal with middle-aged users' anxiety for knowledge. Such business model is not sustainable in the long run, in that many users subscribed as many as 10 courses, but only sticked to one or two, making a high repurchase rate impossible, Lai told NBD.

Therefore top audio platforms such as Qingting FM, Himalaya FM and Lizhi started to offer a wider range of paid contents, such as audio books and live audio streaming. Some of them are also seeking new growth drivers by enabling social activities or developing smart speakers.

Penetration rate critical to the industry

NBD noticed that a low penetration rate has been a bottleneck for the development of the online audio industry since its inception as majority of internet users, represented by the post-1980s and post-1990s generations, don't have the habit of listening radios.

According to a report released by market research firm Jiguang, as of last July, the penetration rate of mobile video apps has reached as high as 71.4 percent among Chinese smart device owners, with users totaling 642 million, while that of online audio apps has been only about 20 percent.

Xiao Yi, COO of Qingting FM, said previously in an interview that the low penetration rate greatly held back the scale and influence of its audio books.

In regard to that issue, Lai told NBD on Saturday that a lack of innovation is largely to blame. In the past few years, Lizhi has made headways in technological R&D and new product development in this domain. The platform is no longer depending solely on traditional audio products and is seeking new growth drivers by making foray into more audio sectors, such as short audio clips. And Lizhi has turned profitable by far.

Email: tanyuhan@nbd.com.cn