Himalaya's net profit exceeded 500 million yuan in 2024. How to enter the game in the AI era?

Recently, there have been rumors again that Ximalaya is about to be acquired, and this time it's still Tencent Music. However, its valuation has been significantly cut. But both parties have denied the rumors. Tencent said that such news has been spreading for a long time, and Ximalaya said it was unaware.

All of a sudden, the real internal situation of Ximalaya quickly became the focus of market attention. In fact, according to insiders, Ximalaya's net profit in 2024 exceeded 500 million yuan. In 2023, its adjusted net profit was 224 million yuan, just achieving nine consecutive quarters of profitability.

Achieving sustainable profitability marks that Ximalaya has completed the most important step in its business progress. Behind this is its content ecosystem built around audio, diversified monetization models, and cost optimization. Now, Ximalaya has been exploring for 13 years.

Looking at Ximalaya's development history, it also reflects the gradual maturity of the domestic audio market. Latercomers such as Tencent Music, ByteDance's Fanqie Changting and Fanqie Xiaoshuo mostly follow Ximalaya's development path and divide the market based on their user base.

However, the current audio industry is facing severe challenges. On the one hand, emerging industries such as short - videos and live - streaming are constantly squeezing the market space of the audio industry. On the other hand, the bottleneck of user growth is gradually emerging, and the competition for users among platforms is becoming more intense, intensifying the anxiety.

Competing solely for the number of users cannot measure the value of a platform. The second half of the audio industry is a comprehensive competition of platform ecosystems. For Ximalaya, the real test may have just begun. It needs to prove to the market that audio should not only be a filler for people's fragmented time but a value carrier that can reshape users' lifestyles.

Digging Deep into Ximalaya's Content Territory

Ximalaya's performance sends a clear signal: this online audio platform has entered the mature stage and has become one of the few content platforms that have achieved large - scale profitability.

The prospectus shows that in 2023, the platform's revenue reached 6.16 billion yuan, and the gross profit margin increased to 56.3%. Among them, subscriptions, advertising, live - streaming, and other innovative products and services have become the four pillars of the platform's revenue, accounting for 51.7%, 23.1%, 18.4%, and 6.8% respectively. Paid subscriptions are the most important source of revenue.

The number of paid members is the foundation of a content company. The core driving force for paid subscriptions is that users recognize the platform's content and services and are willing to pay to efficiently obtain valuable content. To achieve this goal, Ximalaya's content ecosystem has undergone two key leaps:

At first, Ximalaya's idea was simple: quickly accumulate audio copyrights, sign contracts to transform content into audio form, and establish a rich content copyright library. By the end of 2023, it had accumulated 488 million audio files in 459 categories, with a total content duration of more than 3.6 billion minutes, covering areas such as personal growth, history and culture, parent - child emotions, business and finance, and entertainment.

At the same time, Ximalaya has cooperated with 220 leading publishers such as CITIC Press and established partnerships with more than 150 online literature platforms such as Yuewen Group. In addition to copyright authorization, publishers also produce audiobooks. According to data from CIC, in 2023, Ximalaya had more than 5.2 million audiobooks.

After establishing the first line of copyright defense, Ximalaya had a clearer understanding of the development of its content ecosystem: the UGC model launched by existing content companies is too thin and of uneven quality, while relying solely on PGC may fall short in terms of content quantity.

To ensure the vitality of the content ecosystem, Ximalaya established the "PGC + PUGC + UGC" strategy, achieving full - coverage of audio content from professional head - produced content to long - tail user - produced content. By the end of 2023, there were 2.9 million active content creators on the platform, and excellent creators such as "You Sheng De Zi Jin", "Huan Ying Kong", and "Tou Tuo Yuan Jiang Gu Shi" emerged.

The most direct benefit of improving the content ecosystem is to attract users. It is understood that as early as 2019, the number of registered users of Ximalaya had exceeded 600 million. By the end of 2023, the total - scenario MAU (monthly active users) of Ximalaya was 303 million.

Although Ximalaya, the leader in the industry, is experiencing the pain of slow user growth, the improvement of user stickiness and willingness to pay still shows its unique growth resilience. In 2023, the average monthly active paid users on Ximalaya's mobile terminal reached 15.8 million, and the average monthly active paid members on the mobile terminal were 15.5 million. In addition, the ARPPU of the subscription and live - streaming businesses has been on a continuous upward trend, and the retention rate of auto - renewing and annual - paid members is as high as 75.9%.

Even if user growth slows down, the growth of user payments remains one of the core driving forces for Ximalaya's revenue and a key factor for the market to expect future growth. And the value of the content platform cannot be ignored in grasping this key factor.

How to Regain Content Advantage in the AI Era

The content industry has a long production cycle and faces fierce external competition. To achieve continuous profitability, it is necessary to connect the channels between content, users, and brands and revitalize the channels.

In the process of intelligentization of the audio industry, AI technology is reshaping the content production and operation of the industry. In 2023, Ximalaya established the "Everest Laboratory" and developed the "Everest Audio AI Model", becoming the first large - scale audio - generation model in China to pass the generative AI service review of the Cyberspace Administration. Ximalaya is trying to drive content production, business operation, and commercialization through AI technology, continuously improving the platform's efficiency and competitiveness, and also re - releasing the value of the content platform with the help of AI.

AI can provide support for content creation. For example, the audiobooks on the platform are produced using AI, which is more than 50 times more efficient than manual production. For UGC creators, Ximalaya has launched the AI audio production tool "Yin Jian", which also greatly shortens the post - production time, reduces the creative threshold from a technical perspective, and stimulates the creative enthusiasm of ordinary users. By the end of the year, the AIGC penetration rate of the average monthly active users on Ximalaya's mobile terminal had reached 14.8%, and the AIGC content on the platform reached 240 million minutes, accounting for 6.6% of its audio content.

In terms of operating costs, Ximalaya uses AI to complete content review, and the coverage rate of automatic content filtering reaches 72.2%. At the same time, 88.7% of user consultations are handled and resolved by AI intelligent customer service, greatly improving the platform's operating efficiency.

In addition to continuously improving the platform's premium membership system and the anchor's private - domain membership system, Ximalaya is also deeply exploring the platform's commercialization potential. The person in charge of Ximalaya's commercial products pointed out that the key to the commercialization of content platforms is to improve the efficiency of connecting with users and reduce the connection cost.

Simply put, it is to make the data accurate and rich, make the advertising matching more accurate, and drive a significant improvement in advertising business efficiency.

In response, in 2024, Ximalaya upgraded the "Wutong Marketing Platform". The "Wutong 3.0 version" introduced the marketing AI Agent as the core hub for advertising placement, automatically connecting the AI advertising placement strategy center, the AI data asset center, and the AI material center, reducing the selection and understanding costs for customers, improving advertising placement efficiency, and truly realizing the connection of brands, users, and anchors with audio - paid content as the product.

At the same time, on the user side, Ximalaya launched the intelligent voice assistant "Xiaoya", which avoids the limitations of traditional search functions that rely on keyword matching. Through the "AI Search" function it is equipped with, relying on advanced large - model technologies such as DeepSeek - R1, it integrates the platform's audio content data, builds a content matching system, and more accurately captures user needs.

Podcasts are another growth area in the content business.

The podcast business has been very popular in recent years. Audio platforms such as Litchi FM, Qingting FM, and NetEase Cloud Music have all opened podcast channels to explore the second growth curve. Among them, Ximalaya has the largest user base, and the age distribution of its podcast users is concentrated among high - net - worth users aged 24 - 40.

The person in charge of Ximalaya's podcast business said that this group of people has three needs: cognitive improvement, obtaining practical knowledge, and emotional comfort. "Meeting their needs and solving their cognitive anxiety presents great commercial benefits."

To achieve this benefit, Ximalaya not only amplifies the service ability of anchors and the auxiliary power of AI through platform connection but also has a clear idea for the promotion of paid podcasts.

The promotion of paid podcasts cannot rely on hard advertising. The key lies in the program quality, long - term reputation, and trust accumulation. The "2024 Podcast Industry Report" shows that 72% of users are simply interested in the program, topic guests, or anchors; 57% of users choose to pay because they have long - subscribed to the program's production and distribution or trust the program.

And the content side is precisely Ximalaya's strength, which brings the problem back to the content service ecosystem itself.

It is reported that in 2023, there were more than 240,000 commercially valuable podcasts on this business segment, covering 16 tracks and 31 content categories. The number of listeners of Chinese podcasts on the platform also exceeded 220 million in 2023, which means that 2 out of every 10 Internet users listen to podcasts on Ximalaya.

Seeking Certainty in Performance Growth

When the audio industry enters the integration period, independent audio content companies need to find a niche for survival between vertical platforms and the ecosystems of Internet giants.

The "China Internet Audio - Visual Development Research Report (2024)" shows that Ximalaya's user penetration rate has reached 77.8%, firmly ranking in the first echelon of the online audio industry. However, user diversion is obvious. For example, Xiaoxiangyu focuses on intellectual youths, and NetEase Cloud Music features the "music + podcast" model, diverting the attention of some users.

Then, as the customer acquisition cost continues to increase, new scenarios have become a must - fight area for audio content companies. Generally speaking, high - frequency scenarios are the "basic market" for each platform. If relying solely on them, it is easy to fall into homogeneous competition. Vertical scenarios are the differentiators for each platform. However, if they are overly vertical, it will also lead to the narrowing of the platform ecosystem and squeeze the commerciality.

In response, Ximalaya chooses to cover all usage scenarios. Whether it is the high - frequency scenario of commuting or the vertical scenario of parent - child companionship, even if a single scenario is occupied, the platform still has suitable audio content to meet the needs of users at different stages and establish recognition in niche areas.

For example, Ximalaya Kids targets children aged 0 - 12. Its audio content covers many fields such as fairy tales, science knowledge, history and culture, and language learning. It has top - tier children's IPs such as "Disney" and "Peppa Pig", as well as original IPs such as "Detective Mike Fox", "Curiosity Sets Off", and "Li Nezha's School Days".

In addition, Ximalaya has extended the scenario boundaries to the Internet of Things, in - vehicle scenarios, and other open platforms. By the end of 2023, the monthly active users in its Internet of Things and in - vehicle scenarios reached 98 million. It has also established partnerships with more than 80 vehicle manufacturers such as BYD, Hongmeng Zhixing, Xiaomi, Li Auto, and BMW, more than 20 solution providers, and more than 10 aftermarket manufacturers, improving the service chain, covering 98% of connected vehicle models, and the average daily listening time of active users reaching 95 minutes.

Relying on the platform's content reserves, continuous creation system, scenario - based service experience, and accumulation of leading cooperation cases, by the end of 2024, the volume of panoramic sound content on the Ximalaya platform exceeded 3,300 hours and more than 27,000 episodes, and the user listening volume increased by 5 times year - on - year. It is expected that by the end of 2025, the content scale will exceed 50,000 episodes.

On the one hand, Ximalaya enriches its business scope and explores new stories in podcasts. On the other hand, it continuously improves the content service ecosystem, promotes audio content to cover all scenarios, and meets the needs of more users. This is Ximalaya's effort to become an inseparable part of users' lifestyles, and it anchors its performance growth on in - depth user value.

Ximalaya's continuous profitability is solid evidence of the commercial potential of the audio industry. In the future, the audio industry will also face more intense competition. Whether it is independent development or ecological attachment, only by continuously creating irreplaceable "sound value" can one take the initiative in this long - term battle.