Tencent Music's Acquisition of Ximalaya: The Next Level of Imagination for Audio Intentions
The audio market is undergoing a profound and subtle evolution.
On the evening of June 10th, Tencent Music Entertainment Group (hereinafter referred to as "Tencent Music") issued an announcement stating that it had signed a merger and acquisition agreement and plan with Himalaya Holdings (hereinafter referred to as "Himalaya").
According to the agreement, Tencent Music intends to acquire Himalaya through a cash payment of $1.26 billion, plus Class A common stocks not exceeding 5.1986% of the total number of shares (the total number of shares is calculated based on the issued and outstanding common stocks in the five trading days before the transaction closing). In addition, the founding shareholders of Himalaya can receive Class A common stocks as incentives, with the total number not exceeding 0.37% of the total number of shares.
Once the announcement was made, discussions about the "long - audio" business became intense, with doubts that the content industry could not live up to the capital's imagination. From the development history of the audio industry, Himalaya's choice is actually a re - anchoring of the "value of sound".
The long - audio track is highly competitive and diversely developed. In the early days, online audio platforms represented by Himalaya, Qingting FM, and Lizhi FM completed the early consumer cultivation and education for the market, establishing the market's initial understanding of "long - audio". Subsequently, Internet giants like Tencent and ByteDance entered the market with their traffic advantages. There also emerged the Xiaozhouyu APP, which focuses on creating a social atmosphere and building community stickiness. These competitors have changed the original landscape of the domestic audio market.
However, Himalaya has been well - loved by users due to its long - standing establishment and wide - ranging content categories. After achieving its first profit in the fourth quarter of 2022, Himalaya's adjusted net profit reached 224 million yuan in 2023, and its net profit exceeded 500 million yuan in 2024. It has now achieved nine consecutive quarters of profitability.
In terms of the key data of monthly active users, by the end of 2023, Himalaya had reached an average of 303 million monthly active users across all scenarios. Therefore, we cannot simply judge the lack of vitality in the long - audio business based on this merger and acquisition. This merger in the audio industry is precisely the result of Himalaya's in - depth exploration of users' audio needs and its careful consideration of the continuous improvement and iteration of the long - audio content platform.
01
Building a Chinese - version Spotify is not accidental
Music companies have always been troubled by the issue of sustainable profitability. Spotify took 18 years to achieve its first annual profit in 2024, proving to the market the feasibility of transforming from a music company to an audio platform.
The common problem for music companies to make profits is the high cost of copyrights. In the early days, Spotify was simply a music platform with high copyright fees. It had to pay about 70% of its revenue to copyright holders, and the insufficient profit margin made it difficult for the company to cover its costs. Under the external pressure from Apple Music and YouTube Music, Spotify changed its business strategy by incorporating podcasts, audiobooks, and videos into its system. The rich content segments attracted a large number of original creators and further increased users' willingness to pay.
Similar to the difficulties faced by Spotify, the domestic music streaming market is saturated, and user growth has reached its peak. Even if short - term profits are achieved, it is difficult to maintain long - term sustainable growth. In addition, short - video platforms are creating hit music to compete for user traffic. ByteDance's Qishui Music, relying on the unique consumption scenario of Douyin, avoids the competition for copyrighted music. It allows users to link videos to Qishui Music and earn income through advertising and content sharing. Kuaishou's Kuaishou Music had 340 million Kuaishou users posting 10.6 billion music videos by September 2023, with the playback volume of hit songs reaching 386.4 billion times. As a result, it is imperative for traditional music companies to find new growth points.
However, whether it is to increase the per - user payment or optimize the internal operational efficiency, the marginal growth effect will eventually decline, making it difficult to break through the inherent scale and profit ceiling of the industry. The competitive barrier of a single category is weak. Therefore, horizontal expansion has become the development direction for platforms.
The merger between Tencent Music and Himalaya may effectively connect the core scenarios of the "ear economy". Through technological cooperation and innovation in content consumption, it can further raise the upper limit of the streaming music industry and bring more imagination to the audio business.
On the other hand, it has become a common understanding in the industry that user growth has reached its peak. The core strategy of audio platforms is shifting from incremental expansion to in - depth cultivation of the existing user base. Retaining existing users and effectively increasing their willingness to pay has become the key to development. Against this background, in - depth exploration of niche tracks is an effective way to enhance user stickiness and build a differentiated competitive barrier. In 2023, Xiaozhouyu, Fanqie Changting, Qimao Free Audiobooks, and Himalaya all increased niche content, segmented their content, and improved the richness of audio content.
Himalaya has a deep accumulation in the long - audio field, with a large number of podcasts and audiobook libraries, providing users with a diverse and comprehensive audio experience. By the end of 2023, Himalaya had accumulated 488 million audio files in 459 categories, with a total content duration of more than 3.6 billion minutes. It includes niche content such as online novels, personal growth, history and culture, parent - child emotions, business and finance, and entertainment, meeting the content needs of users at different ages.
According to data from CIC, by the end of 2023, Himalaya had more than 5.2 million audiobooks, with a cumulative playback volume of nearly 817 billion times. By the same time, it had also established cooperative relationships with more than 220 leading publishers such as CITIC Press and about 150 leading online novel platforms in China such as Yuewen Group.
In addition, Himalaya has established a "PGC + PUGC + UGC" strategy, achieving comprehensive coverage of audio content from professional - produced content at the top to user - generated content at the long - tail. By the end of 2023, there were more than 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.
Perhaps, compared with becoming a "Chinese - version Spotify", the future of Himalaya and Tencent Music will be more diverse and full of local vitality.
02
Sound has more untapped monetization space
The value of sound lies in breaking the boundaries of interaction and promoting multi - terminal integration.
Sound accompanies people during their morning and evening commutes, fitness runs, and housework. Any scenario where vision is occupied becomes an opportunity for sound to break through. So, what are the scenarios where long - audio can most easily enter and break through? Maybe we can get some insights from Himalaya's active layout.
Himalaya has integrated panoramic sound technology and centered around AI - based personalized recommendation. It has reached cooperation agreements with more than 80 automobile manufacturers, including leading ones such as BYD, Hongmeng Zhixing, Xiaomi, Li Auto, and BMW, covering 98% of connected vehicle models. The average daily listening time of active users has reached 95 minutes, realizing the full - scenario interconnection of sound on mobile devices, in - vehicle devices, and the Internet of Things.
For Himalaya, the promotion of new scenarios and new devices, as well as the popularization of in - vehicle, smart home, and Internet of Things devices, all present untapped growth opportunities in the audio industry. The core of such solutions is to use hardware to drive software services, achieve in - depth scenario exploration, intelligent recommendation, and user growth.
In the commercialization path of the in - vehicle scenario, Himalaya has developed a three - layer combination of services. It started with customized development in the early stage, then moved to membership distribution and service authorization in the middle stage, and now offers brand radio stations, in - vehicle personalized content service agents, and combined sales of memberships, in - vehicle points, and traffic. These are all value - added membership services designed specifically for the in - vehicle cockpit scenario.
At the 2025 Shanghai Auto Show, the latest intelligent cockpit will deeply integrate Himalaya's AI Agent's "AI Daily News" function into the cockpit voice system. It can filter hot news based on historical listening, use AI to automatically match content needs in different driving scenarios, and support real - time voice Q&A interactions.
In the long run, smart cars are expected to become the next mobile ecosystem. Himalaya is promoting the integration of AI technology, audio content, and in - vehicle scenarios. This is not only to provide users with a more complete consumption experience but also to break through the limitations of traditional advertising placement and explore the next business model.
03
"AI in All" is not a reckless move
Himalaya is very firm in its attitude towards "AI in All". In a letter addressed to all friends jointly issued by Himalaya's co - founders Chen Xiaoyu and Yu Jianjun, it is clearly stated that "we will continue to promote the in - depth integration of AI tools and the creative ecosystem".
This transaction will help both parties concentrate their resources, increase investment in technological innovation, accurately understand user needs, and build the best user experience.
Looking at Himalaya's actions in the past two years, its AI strategy is more systematic and in - depth than we thought. Currently, Himalaya's AI development mainly focuses on content detection, content distribution, content generation, and operational efficiency improvement. In 2024, Himalaya independently developed the "Everest AI Audio Multimodal Large Model". In April 2025, Himalaya's self - developed intelligent voice assistants "Xiaoya" and "Bobo" were launched.
The former is trained with millions of hours of self - copyrighted audio data on the platform. It has technical capabilities such as emotional output, natural expression, language translation, and rapid voice cloning, and is widely used in scenarios such as content creation, digital avatars, and voice interaction, and has achieved commercialization. The latter relies on advanced large - model technologies such as DeepSeek - R1, integrates the platform's audiobook content data, and builds a content matching system to more accurately capture user needs. Through the "AI Search" function, it effectively avoids the limitations of traditional search functions that rely on keyword matching. During the gray - scale testing phase, the 7 - day access retention rate exceeded 15%, improving user stickiness.
By the end of 2023, the AIGC content on the Himalaya platform reached 240 million minutes, accounting for 6.6% of its audio content. The AIGC penetration rate among the average monthly active users on mobile devices had reached 14.8%, meaning that nearly one - seventh of the monthly active users were using relevant services and content in their daily lives. Himalaya has also established a timbre library consisting of 535 synthetic voices to adapt to different scenarios and express human feelings and emotions, further reducing the threshold and cost of content generation and enriching creators' inspiration with the support of AI.
In the future, AI technology will be conveniently and seamlessly integrated into every consumption scenario, reshaping the relationship between sound and life. For the audio industry, following the trend of the AI era, making good content accumulation, and technological innovation are the keys to effectively responding to the ever - changing user needs and consumption habits.
As Himalaya moves forward in the long - audio track, marked by turning losses into profits, the deeper meaning of this merger may be to expand the audience beyond just music listeners and bring more imagination to the future commercial exploration of long - audio.