On May 24, NetEase Cloud Music disclosed its first quarter financial report for 2022. The financial report shows that NetEase Cloud Music's net revenue in the first quarter of 2022 was 2.1 billion yuan, a year-on-year increase of 38.6%. Thanks to the growth of member subscriptions, social entertainment, and overall improvements in cost control, it recorded a gross profit of RMB 2.52 in the first quarter of 2022. billion, and the gross profit margin increased significantly to 12.
The financial data is strong, with a payment rate of 20.2, continuing to lead the industry. Net income in the first quarter of 2022 reached 2.1 billion yuan, a year-on-year increase of 38.6 and a month-on-month increase of 24. Among them, online music service revenue in the first quarter was 890 million yuan, mainly due to the substantial growth in membership subscription sales revenue. The number of monthly paying users of online music services reached 36.74 million, a year-on-year increase of over 51%. The online music service payment rate further increased to 20.2, continuing to lead the industry.
In the first quarter of 2022, the gross profit margin increased significantly to 12, with a gross profit of 252 million yuan. Thanks to the increase in net income and improvement in cost control, the gross profit margin further increased to 12 in the first quarter of 2022, and a gross profit of 252 million yuan was recorded, which was higher than the whole year of last year. The adjusted net loss in the first quarter of 2022 dropped to 151 million yuan from 283 million yuan in the first quarter of 2021, a significant narrowing of 46.6% year-on-year.
Social entertainment services are growing rapidly, unleashing the commercial potential of the platform. In the first quarter of 2022, social entertainment services and other revenue was 1.19 billion yuan, a year-on-year increase of 61.6. Among them, audio live broadcast accounted for the majority of the live broadcast business and grew rapidly, with strong stability and growth. The number of monthly paying users of social entertainment services reached 1.182 million, a year-on-year increase of approximately 170.
The platform has strong internal development momentum, with more than 450,000 registered independent musicians. In 2022, the number of monthly active users of NetEase Cloud Music's online music service will be 182 million, which is basically stable year-on-year. The ratio of daily active users/monthly active users this quarter has remained stable at more than 30, indicating high platform user stickiness. As of the end of March 2022, NetEase Cloud Music's content library contains more than 90 million music tracks, including music from well-known labels and independent musicians. In the first quarter of 2022, the number of registered independent musicians on the platform exceeded 450,000, a year-on-year increase of approximately 70%; *** created approximately 2 million music tracks, contributing uniquely attractive content and community interactive experience to the platform.
The original musician support system continues to deepen, covering the entire link of musician creation, growth, and income, and providing all-round support for platform musicians. Including special support initiatives such as the Stone Project, the Ladder Project, the Hard Floor Fireplace Night, the Hard Floor Original Music Chart, the Star Collection Songwriting Competition, and the "Music Explorer Action" Songwriter Training Program, we will continue to explore the new generation of original creations for the Chinese music scene. strength. Recently, Jude, a new generation singer-songwriter discovered by NetEase Cloud Music's "Stone Project", was nominated for the Best Chinese Male Singer Award at the 33rd Golden Melody Awards for the second time with his new album "The Last Aquarium". Musicians shortlisted for this year's Golden Melody Awards, such as Lu Yanliang, Xu Jun, and Yuan Yawei, have also appeared on NetEase Cloud Music's hard original music list many times.
Deepen services for musicians behind the scenes and continue to promote the overall prosperity of original music. In January, NetEase Cloud Music launched BeatSoul, a one-stop Beat trading platform. Recently, the industry's first large-scale original beat production competition "Rhythm Player" launched by NetEase Cloud Music came to an end. The competition attracted nearly 3,000 music producers to participate and received more than 5,000 submissions. Due to its professionalism and authoritativeness, attracted the attention of the entire music industry. Recently, NetEase Cloud Music held the industry's first large-scale selection event focusing on behind-the-scenes arrangers. It received nearly 10,000 entries and more than 2,000 new generation Chinese arrangers participated in the selection. It is reported that NetEase Cloud Music will focus on bringing continuous and efficient exposure to the creators behind the scenes, promoting more music cooperation, obtaining more music income, and promoting the overall prosperity of original music.
Continue to focus on self-made content, have significant capabilities in producing and promoting hit items, and enhance the diversification and differentiation of content products. In the first quarter, popular works such as h3R3's "Waiting for Winter (Memories)", Jiang Chen's "Have Kind", Liu Minxuan's "Time of a Drop of Tears", Starling8's "Bitter Tea" and other popular works frequently appeared, demonstrating the strong originality of NetEase Cloud Music Hot song incubation ability.
User participation continues to increase, creating an immersive music community. In the first quarter of 2022, daily active users listened to music for about 82 minutes, which was higher than the 76.5 minutes in the first quarter of 2021. About half of the users also browsed the "comment area" while listening to music, reflecting strong participation. As of March 2022, the proportion of music playback recommended by the platform has increased to 33%, the total number of playlists created by NetEase Cloud Music users has reached 3.25 billion, and UGC podcast content covers a total user base of approximately 20%. User-generated content such as song comment areas, playlists, blogs, updates, and podcasts are constantly enriched, and we continue to create a one-stop, immersive and comprehensive music content community.
Product innovation moves toward “user control” and optimizes user experience. In the first quarter of 2022, NetEase Cloud Music launched a number of user-oriented innovative functions such as seamless playback and double-speed playback to meet users' diverse and personalized listening preferences and needs. Recently, NetEase Cloud Music launched Hi-Res sound quality and tested the "Cloud Random" custom random playback function. "Cloud Random" has achieved another breakthrough in the customized needs of users for listening to music scenes. In the future, NetEase Cloud Music will also add customizable capabilities to recommendation scenarios that are highly requested by users, such as daily recommendations and private FM, to create surprising music products for users.
A recent research report from Orient Securities pointed out that the valuation of the Hong Kong film and television entertainment sector is at a historically low level. From the perspective of price-to-book ratio, the current market-to-book ratio of the sector is estimated at 1.23 times, which is around the 35th percentile since 2005 and is at a low level. The historical median is about 1.35 times the price-to-book ratio. Since the beginning of this year, Hong Kong stocks have experienced a sharp decline. Now they have a high investment performance-price ratio, and their valuations have also entered the recovery stage. Many securities firms, including Kaiyuan Securities and Guosen Securities, have recently given Cloud Music a buy rating.
As the world's leading music community, NetEase Cloud Music has built a unique user attraction with its differentiated community ecology with high user participation. In recent years, NetEase Cloud Music has continued to make efforts in the field of original music, promoting comprehensive, systematic, and progressively in-depth industrial innovation and innovative services, helping the development of China's original music and the prosperity of Chinese music.