Photo/Shetuwang

May 28 (NBD) – China's leading podcaster Ximalaya FM replied on May 26, regarding the concurrent retreat of 12 board directors, that the changes were made as part of its effort to set up a Variable Interest Entities (VIE) structure, which is widely translated as a step towards an overseas listing.

It's noted that since February 2019, some shareholders of Ximalaya FM have withdrawn from the company successively. On May 24, a venture capital firm under Xiaomi was also removed from the shareholder list and 12 board directors including Xiaomi's vice president Hong Feng pulled out of the audio giant.

"Changes in the shareholder structure signals Ximalaya FM's ambition in making debut in the U.S. capital market," Li Songlin, an analyst from iiMedia Research, told National Business Daily (NBD). "As one of the leading audio service providers, Ximalaya FM, riding the tide of 'ear economy', potentially has the edge to go public. But the withdrawal of shareholders might arouse public concerns and undermine public confidence on the company."  

In fact, speculations over the podcaster's IPO have never ceased. Dai Zhikang, founder of Zendai Group, the second largest shareholder of Ximalaya FM, disclosed in 2018 that Ximalaya FM was expected to make debut on the A-share market this year. Later reports emerged saying the company planned to ring the Hong Kong bell.  

However, the audio giant has denied the IPO rumor as well on the day.

China's online audio market has been gaining a robust momentum these days. A report by iiMedia Research showed in 2018, the number of online audio users hit 425 million, up 22.1 percent from a year ago, much faster than the growth of mobile video and mobile reading sectors.

Ximalaya FM took the lead in the market with around 89 million active users in the fourth quarter of last year, much higher as compared to runner-up Lizhi FM which has about 34 million active users. Despite the dominant presence, the company has troubles as well.

According to qichacha.com, a Chinese enterprise intelligence website, Ximalaya FM has been involved in over 700 cases related to copyright infringement so far.

"The audiobook sector can be easily overwhelmed by copyright disputes," analyzed Li Songlin. "Audio platforms like Ximalaya FM should avoid such dissension by purchasing copyrights and fostering more content producers."

In Li's mind, the future of the audiobook industry will bank on premium contents, but how to help users to form the habit of paying for contents will be one of the most significant challenges facing Ximalaya FM.

"At the same time, as other audio services providers rush for expansion, the lack of diversity among different platforms will be deteriorated," Li told NBD, "Ximalaya FM should differentiate the contents to meet various demands so as to stand out from the competition."  

Email: lansuying@nbd.com.cn