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Audiobook platform eyes steady growth

By SHI JING in Shanghai | China Daily | Updated: 2021-12-13 09:23
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Yu Meng (center), CEO of Lazy Joy, attends a summit for outbound content providers in Shanghai on Oct 28. [Photo provided to China Daily] 

North America contributed nearly 45 percent of the market's total revenue in 2019

For Yu Meng, the purpose of starting up audiobook and e-book platform Lazy Joy is closely related to his personal choice of recreation-listening to audiobooks whenever he has the time to do so.

Describing himself as a "heavy user" of audiobooks, Yu does not stick to one genre. Fiction, nonfiction, autobiographies, history and business are all included in his audiobook reading list.

His extensive reading interest happens to coincide with Lazy Joy's discovery of audiobook consumer habits in overseas markets. While some users search for culinary skills on the platform, others look for travel guides. Self-development books, fantasies and romantic fiction can all find their respective readership.

Actually, Yu thoroughly studied the global audiobook market before he started Lazy Joy in late 2019. The international audiobook market, best represented by Europe and the United States, is a mature market reporting 30 percent compound annual growth rates for four years by 2020.

Deloitte, a provider of audit, consulting, tax and advisory services, said the global audiobook market was valued at $3.5 billion in 2020, up 25 percent year-on-year. North America accounted for nearly 45 percent of the global business, the largest share of total revenue, in 2019. The region is expected to continue dominating the market until 2027, said California-based market consultancy Grand View Research.

Yu explained that reading is a rigid demand in high-income markets such as Europe and the US. Readers in these markets choose between paper books and audiobooks. But as long as they opt for audiobooks, they are willing to pay.

In middle-income markets, demand for audiobooks is rising. In low-income markets, however, market education is still needed due to the low awareness of copyright protection and the price of internet traffic. But free audiobook services can be provided in such markets to attain more readership, he said.

Based on a clear understanding of the different market layers, Lazy Joy has offered audiobook services in 170 countries and regions ever since it started operations. The company now possesses 550,000 digital content rights.

The extensive reach of Lazy Joy has paid off. It managed to break even in October, and its rapid development would make most startups envious. The reason it took a shorter time for the company to achieve profitability is probably because Yu chose the right path from the very beginning.

"The domestic audiobook market is already intensely competitive. That is the main reason why we have chosen to tap into overseas markets in the first place. The earlier we make the move, the earlier we can get rooted in overseas markets and deploy globally," he said.

His description of the Chinese audiobook market is proved by the current status of the three leading audiobook platforms. Ximalaya FM, which has a 70 percent market share, still recorded losses in its latest fiscal report. Lizhi FM, which was the first to go public in January 2020, has seen its share price stay at a low level. Dragonfly FM is surviving by seeking more rounds of financing.

Instead of giving equal attention to each overseas market, more efforts are devoted to 26 markets, including Germany, the United Kingdom, Spain and South Africa.

Users in these markets understand it is perfectly justifiable to pay for copyrighted content. In other words, the audiobook provider no longer needs to educate users in these markets. As long as they can provide content on popular themes such as thrillers, detective stories or autobiographies of celebrities, users will naturally pay for it, Yu said.

As Chinese internet giants like Huawei, ByteDance and JD extended their reach into overseas markets, Lazy Joy has entered into cooperation with industry leaders by authorizing them to distribute its copyrighted content. In this way, it does not need to worry about attracting users as the industry leaders have already built a large user base overseas.

The possibility of riding the tide of outbound Chinese internet leaders is based on the rich reserve of copyrights that Yu started building six years ago before his startup was founded. Such advanced preparations became even more valuable after COVID-19 shook up the global market.

"It is true that people spend more time on audiobooks after the COVID-19 pandemic as they are more confined at home due to quarantine regulations. It may sound like good news to audiobook platforms, but the truth is sufficient content supply has become a huge challenge to a large number of audiobook service providers, as they cannot fly overseas to buy copyrights during the pandemic," Yu said.

"The copyright industry is basically an industry built on trust, and trust cannot be built between two parties without face-to-face communication. The Lazy Joy startup is just a natural outcome of years of experience in the content industry," he said.

Internet leaders understand the rich copyright reserve that Lazy Joy owns can be translated into value-added services for their devices and products. Shanghai-based Grand View Capital, a venture capital firm, showed its confidence in Lazy Joy's business model by investing more than 3.5 million yuan ($549,654) in the company in February 2020.

Yu understands the overseas audiobook market is far from getting saturated. The penetration rate of audiobooks is about 26 percent in the US, most of which is represented by applications installed on Apple devices.

But Lazy Joy focuses on audiobook applications preinstalled on Chinese branded mobile phones, most of which work on the Android operating system. The company can reach customers using the Android system and devices, which means there is clear room for growth, he said.

"The thriving of a startup is largely reliant on choosing the right soil in the first place," he said.

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