The audio business is often overlooked. However, the NielsenIQ report draws attention to this changing and growing industry, where players like LIZHI show a promising future.
Data monitoring and analysis company NielsenIQ has released its latest report on the online audio entertainment industry in China. Whether it’s listening to the radio on the way to work, before going to bed, or playing sports, the so-called “hearing savings” has gained a huge impact on the daily lives of many people. Strong demand has helped increase the market to 280 million users in China.
Today, the online audio entertainment industry has developed into four main segments, including mobile audio platforms represented by LIZHI (Chinese: 荔枝), digital text-to-audio platforms such as IREADER (Chinese: 掌阅), online music platforms represented by QQ Music (Chinese: QQ音乐) and NetEase Cloud Music (Chinese: 网易云音乐), as well as information service platforms such as iGet (Chinese: 得到).
In addition, NielsenIQ notes that the main attribute of mobile audio platforms led by LIZHI is the accompaniment element. It can harmoniously integrate into various life scenarios of users through the advantage of sound, and accompany them in every fragmented moment in time.
The consumers of these platforms display the characteristics of being highly educated, living in Tier 3 cities or below, and young. For example, over 90% of LIZHI users were born after 1990. In addition, their career growth is stable and promising, and the average monthly income, according to the report, is 12,774 yuan. The convenient and related features offered by the platform allow users to listen to audio programs at different times and scenes to relax, improve themselves, or even meet new friends.
In particular, LIJI addresses the aspect of accompaniment through social functions. Its User Content Model (UGC) allows creators to share and share their work in real time, resulting in an active online community. Capital markets firm head Effie Kang told EqualOcean that “the advantage of this type of model is that it allows LIZHI to retain current users and attract new users to join the platform.” Its success can be seen in the company’s Q1 2022 results, which showed that the average monthly active audio entertainment mobile user (MAU) increased by 11% to 9.14 million.
In addition, users of online audio platforms have a high ad acceptance rate of 80%, which has helped accelerate the commercialization of audio media. More and more brands are willing to invest in audio for its sonic value, communication value, audience value, and stage value. For brand owners, they realized the importance of focusing on brand equity management in relation to their sound and creating an exclusive sound symbol. At the same time, online audio advertising outperforms traditional media in brand communication and personalized precision marketing. Effie Kang also believes that mobile audio platforms will have more diversified and innovative revenue generation models beyond advertising in the future.
Given these commercial interests, mobile audio platforms are looking to cash in. Effie Kang mentioned that key distribution channels “include virtual rewards, direct advertising, subscription fees, and content customization.” In particular, content customization ads are relatively less intrusive to users. They are not uniform in style, but are compatible with the content of the program and contain storytelling, which makes them easier for users to understand.
The audio will certainly have unique value. Its application will be considered in different consumption scenarios in the future as car gaming and Internet of Things (IoT) technologies develop. The future looks bright for LIZHI and other companies operating in the online audio entertainment industry in China.