NetEase Cloud Music just reported a stellar 2023, with more paying subscribers than ever before leading to their first year of net profit.

NetEase are the second largest music service operators in China, behind only Tencent Music Entertainment. Their position has gotten even better after a fantastic 2023 saw record numbers for users on NetEase.

They ended the year with 44.12 million paid subscribers, a 15.3% year-on-year growth from the end of 2022. Those paying users helped lead the company to it’s first full year of making a net profit. Their overall revenue from music services grew by 17.6% to RMB 4.4 billion – roughly $621.1 million. NetEase said that the growth was primarily thanks “to the growth in revenue from sales of membership subscriptions”.

Beyond their paying users, NetEase reports an impressive 205.9 million monthly active users (MAUs) for 2023. At 8.7% year-on-year growth for MAUs, it seems that they are growing paying users much quicker than overall user growth – a great sign for the service.

They have a way to go to match market leaders Tencent’s 103 million paying subscribers, reported at the end of Q3 2023. That number is likely to be even larger for the year. Their 2023 full-year results will be published on March 19th.

NetEase saw a significant decrease in revenue for their social entertainment services division – 33.6% less year-on-year. They put this down to “a more cautious operating strategy” which has clearly worked, increasing paying subscribers and leading to their first year of adjusted net profit. NetEase Cloud Music reported RMB 818.5 million (roughly $115.5 million) in net profit for the year.

NetEase put it down to “monetization momentum from our core online music business and our optimized operating efficiency and cost structure.” They add: “We continually engage our community to have more music-inspired connections and strengthen the bonds within our community.”

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