The Unique Business Model of YY Music

Investors who focus on China TMT startup, don’t give yourself a hard time if it’s the first time you heard of a company dubbed YY Inc. “is filing with SEC to go public” on TechNode couple days ago. Even for many Chinese locals, the China southern Guangzhou-based company could catch too much of their attention before.

Now with the surprising IPO prospectus, many finally jumped to the startup to dig out what it is really up to. One interesting finding, is that though few Chinese music-related startup are making money given problems in record industry like piracy, YY’s music business seems to be doing well with stunning revenue and growth.

In the first half of 2012, YY’s music business reached RMB 33.76m(Q1) and RMB 58.96m(Q2) in revenue respectively. When many are complaining about Chinese users just won’t pay, YY Music has already 26.57million monthly active users while 355,000 out of them are paying (data: as of Sep 31th, 2012).

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