Xiami, the reputable music streaming service owned by tech behemoth Alibaba (HKEX: 9988; NYSE: BABA), will end its regular service on February 5 after 12 years in operation and shift to a “to-business platform,” according to the firm’s official announcement on Tuesday, confirming a previous market rumor.
Officially launched in 2008, Xiami has been among the earliest batch of digital music platforms in China and was acclaimed for its niche taste and unique all-genre music curation. In 2013, it was bought by Alibaba, at a time when the e-commerce giant pushed into the digital entertainment industry. Xiami owns more than 30 million tracks and has attracted 40,000 indie musicians to its platform. And yet, amid fierce competition with Tencent Music Entertainment (TME) and NetEase Cloud Music, the service has come to a lamentable end.
According to Xiami’s WeChat post, it will terminate account registration and album purchase, and it will stop charging members as of January 5. Users can transfer account information and playlists to other platforms and apply for refunds. On February 5, Xiami will end all music-streaming functions and one month later its servers will shut down, except for Yinluo—or “Conch Music“—a business service for music distribution, which will continue.
“For 12 years, with each iteration and update of the product, we wanted it to become more pure, return to the music itself, for users to discover a new world of music that belongs to them,” reads Xiami’s farewell letter. “But inevitably, we had missed some opportunities in the development.” It admitted that in terms of the acquisition of licensed content, it had not been able to meet the diversified needs of our users very well. “This is our biggest regret,” Xiami said.
Per stats from research firm Fastdata, monthly active users (MAUs) of music streaming services in China reached 620 million and the number of paying users surpassed 70 million as of October. The market has been dominated by TME (NYSE: TME), Tencent’s US-listed entertainment arm with a market capitalization of USD 32.49 billion. The three main streaming services TME runs—QQ Music, Kugou Music, and Kuwo Music—had 201.2 million, 187.7 million, and 72.5 million MAUs by October, respectively. Netease Cloud Music accounted for 89.0 million MAUs, while Xiami had 22 million.
In September of last year, Alibaba bought a minority stake in Netease Cloud Music, in a USD 700 million co-investment alongside Jack Ma’s Yunfeng Capital. This August, Netease Cloud Music’s VIP services were included in the “88VIP program,” one of Alibaba’s customer loyalty projects.