Chinese tech giant NetEase is reportedly seeking to spin off its popular music streaming service Cloud Music and set it as a publicly traded company, according to NetEase CEO Ding Lei.
“We plan to run several NetEase’s businesses as independent firms. Cloud Music, included.” Ding said in an interview with media last Friday. Yet, he didn’t further disclose a specific timetable for the initial public offering (IPO) plan, but said it will happen when the management is mature and the company will have a leading market position.
NetEase’s move comes after also spinning off its education arm Youdao last week as a public company listed on the New York Stock Exchange. Youdao’s shares stumbled in its debuts, down more than 26% from its IPO price of USD 17 to USD 12.5 when the market closed last Friday.
With the slogan “Music is power,” NetEase Cloud Music enjoys strong popularity especially among young users, and it’s catching up quickly with its main competitor, Tencent Music Entertainment (TME). In March, Cloud Music had 132 million monthly active users, an annual rise of 27.5%, according to Chinese market intelligence agency QuestMobile.
TME – the music division of Tencent – is China’s top streaming dog, housing four services: QQ Music, Kugou, Kuwo, and We Sing. TME went public last year in the US with a downsized IPO of USD 1.2 billion.
Earlier in September, Chinese e-commerce juggernaut Alibaba and Jack Ma’s Yufeng Capital poured USD 700 million in NetEase Cloud Music’s new Series B2 financing round, buying a 20% stake, KrASIA reported.