Online audio platforms turning up volume

China's online audio market is expected to see robust growth in the next few years as audio-sharing platforms work to enrich their content and expand applications, experts said. Growth is also expected from young people's growing willingness to pay for knowledge.

The online audio market includes podcasting as well as audio-sharing platforms that allow people to upload content after approval by the platforms, which are charged with protecting copyrights.

Yu Jianjun, co-founder and CEO of Ximalaya, one of China's biggest audio-sharing platforms, said that during the fourth quarter in 2022, the company had its first quarterly profits since it was established more than 10 years ago.

Yu attributed the earnings breakthrough to three factors: clear development strategies and organizational structures, ongoing cost-cutting measures and the long-term principle of creating value for users.

The company said it plans to assist 10,000 podcast hosts via professional training courses, operational guidance and data traffic support. It also said it would leverage cutting-edge digital technologies, including artificial intelligence and big data, to improve the efficiency of content creation.

In addition, Ximalaya has signed agreements with Phoenix Publishing and Media Group, Penguin Random House, CITIC Press Group and online literature platforms to enrich content offerings and expand the audio digital cultural industry.

The online audio industry has grown rapidly in China in recent years. Revenue was expected to reach 31.2 billion yuan ($4.5 billion) in 2022, up 41.8 percent on a yearly basis, according to consultancy iiMedia Research. The number of podcast listeners was expected to rise from 570 million in 2020 to 690 million last year, according to the consultancy's latest projections.

Zhang Yi, CEO and principal analyst at iiMedia Research, said there is remarkable room for growth in China's online audio industry, fueled by surging demand from users, continuous content innovation and diversified application scenarios.

Zhang said more than 70 percent of users, especially younger listeners, hope to make friends with similar interests and hobbies through online audio platforms. They can make connections through the comments sections. Zhang also said that an increasing number of people are willing to spend money on high-quality audio content.

Founded in 2012, Ximalaya provides a wide variety of audio content through which people produce, share and consume knowledge, information and entertainment. It accounted for 65.5 percent of market share in China's online audio segment last year, followed by Lizhi FM at 39.5 percent and Qingting FM at 35.8 percent, iiMedia Research said.

In 2021, users of Ximalaya's apps spent a total of 1.74 trillion minutes listening to audio content, accounting for approximately 68.3 percent of the total mobile listening time among all online audio platforms in China, according to China Insights Consultancy.

Lizhi Inc, a Nasdaq-listed, Chinese audio-based social and entertainment company, is accelerating steps to expand the applications of artificial intelligence-powered technologies in its interactive audio products to generate new revenue sources and diversify methods of monetization.

Despite the challenging macroeconomic environment, the company in 2022 continued to enhance its technological capabilities, enrich its diversified product matrix and propel global expansion, said Lai Jinnan, founder and CEO of Lizhi.

Lizhi's revenues came in at 2.19 billion yuan in 2022, up 3 percent over the previous year, primarily due to the growth in average user spending on its audio entertainment products.

The company's net profit reached 86.5 million yuan last year, compared with a net loss of 127.3 million yuan in 2021. It was also the first time that Lizhi became profitable in a fiscal year.

Lizhi has recently launched its voice chatbot, called Xiaozhi, on its audio entertainment platform, the Lizhi app, to provide users with an intelligent voice chat experience.

Leveraging natural language processing and intelligent voice technology, the chatbot is able to deliver human-like feedback and generate voice responses based on both vocal and text-based input.

The company said it will continue research and exploration of cutting-edge technologies and optimize AI models to upgrade existing AI chatbot functions. It will also expand the applications of AI chatbots.

"Online audio platforms now monetize primarily through membership payments and advertisements," said Wang Yuanya, an analyst with Beijing-based internet consultancy Analysys.

However, it is difficult for these audio platforms to sustain operations by just relying on paid membership services, Wang said. The podcasting platforms are scrambling to get customers to listen longer in the face of mounting challenges and competition from video streaming platforms and livestreaming websites, which are also striving to offer a variety of entertainment options, she said.

Wang said the authorities should beef up efforts to protect intellectual property rights. It is also important that audio-sharing platforms work more closely with owners of such IP rights and provide more high-quality content and services to increase the willingness of users to pay.