Chinese music streamer Cloud Village’s revenues rose 38.6% to RMB 2.07 billion ($310.3 million) in its first full quarter as a standalone company, the company announced Tuesday. Gross profit improved to RMB 251.6 million ($37.8 million) — up from a RMB 54.0 million ($8.1 million) net loss in the prior year — following “favourable industry trends with more reasonable copyright fees and cost structures,” according to the earnings release.

Launched by internet giant Netease in 2013, Hangzhou-based Cloud Village operates NetEase Cloud Music, China’s second-largest music streaming company behind Tencent Music Entertainment. Revenue from Cloud Village’s music services grew 16.5% to RMB 884.8 million ($132.8 million) as monthly subscribers increased 51% to 36.7 million. However, average revenue per subscriber declined about 9.9% to RMB 6.4 ($1.0), primarily due to discounted subscriptions.

Cloud Village’s monthly music services users were roughly flat at 181.7 million, while the ratio of daily to monthly users remained above 30% in the quarter. The increase in music subscribers pushed the ratio of paid-to-total users from 13.3% to 20.2%. The company also boasted an improvement in average daily listening time, from 76.5 minutes to 82.0 minutes, in part because nearly half of users browsed the “comments section” while listening to music.

Cloud Village also operates social entertainment platforms such as LOOK Live Streaming, Sheng Bo and Yin Jie. Social entertainment revenue grew 61.6% to RMB 1.18 billion ($177.5 million) – 78% of the overall revenue growth – after monthly paying users increased 170% to 1.2 million, although the average revenue per social paying user declined 40.4% to RMB 329.8 ($49.50).

Cloud Village shares, which have traded on the Hong Kong Stock Exchange since Dec. 2, fell 2.1% to HKD 57.50. That put Cloud Village down 63.4% year to date; it was also 72% below the 205.00 initial public offering price. Like TME, whose shares are down 46.4% in 2022, Cloud Village has been hurt by uncertainty created by government regulations, including new rules for online advertising, and a U.S. law that could force foreign companies listed in the U.S. to submit to an audit or face being de-listed.

Looking forward, Cloud Village plans to offer more tools to foster user-generated content creation and utilize social networking features, develop independent artists and offer more in-house production music. Additionally, Cloud Village is considering expansion opportunities in new markets.

LONDON – Concertgoers are being offered the chance to become investors in a number of small grassroots music venues in the United Kingdom, providing a much-needed lifeline to the struggling sector.

The initiative is being run by U.K. charity Music Venue Trust (MVT), which launched what it calls a “world first” investment fund May 23 to raise capital from music fans that will then be used to buy out commercial landlords, effectively transferring ownership to the trust and local patrons.

The trust has identified nine grassroots venues in U.K. towns and cities that it intends to purchase this year, including the 200-capacity The Ferret in Preston and Glasgow’s 120-capacity Glad Café.

MVT says it needs to raise £3.5 million ($4.4 million) to purchase all nine venues, which also include sites in Derby, Newport and Hull, and cover associated costs. It plans to raise that cash through the sale of shares in a member-owned Music Venue Properties fund, targeted at music fans wishing to own a stake in their local music venue as well as what the trust terms “ethical investors.”

Share options begin at £200 ($250) and top out £100,000 ($125,000). Investors under the age of 25 can buy single shares at a discounted rate of £100 ($125). Organizers say investors will receive 3% annual interest, generated through rent returns and more efficient running of the businesses.

Venues purchased by the Music Venue Properties fund will be leased back to the current operators at a reduced rate, says the trust, providing venue managers with greater certainty about their future and the ability to plan ahead. The trust says it will also provide assistance with maintenance, insurance and repairs.

Rent will be set at around 6.5% of a venue’s capital value, meaning that an operator would pay around £65,000 ($80,000) per annum for a property valued at £1 million ($1.2 million). In contrast, many venue operators currently pay between 9% and 14% of a property’s capital value, equivalent to between £90,000 ($112,000) and £140,000 ($175,000) for a property valued at £1 million ($1.2 million), according to MVT.

“The issue of ownership of buildings underlies so many of the problems and challenges we face,” says Music Venue Trust CEO Mark Davyd. He calls the share program “a radical way to improve the economic model by taking the money that’s currently leaving the music eco-system and going out to private landlords, and instead investing it back into supporting venues and supporting artists.”

In the last 20 years, around 400 grassroots music venues have shuttered in the U.K., representing around 35% of the country’s total, according to the trust’s research. Notable closures in London include The Marquee, Astoria, 12 Bar Club and Madame Jojos, with many more small concert venues closing across the country in the same period, denying new and upcoming acts vital spaces to play and learn their craft.

Contributing factors include rising rents, high business taxes and the gentrification of surrounding areas leading to noise complaints and restrictive licensing conditions. The pandemic and accompanying shutdown of the live music industry further increased the pressure on already stretched venue owners and operators.

Davyd says in the past two years, the U.K. grassroots sector has acquired £90 million ($113 million) of new debt in the form of repayable government loans and outstanding payments owed to commercial landlords.

At present, more than 90% of the grassroots venues trading in the U.K. are owned by private landlords, with the average operator having around 18 months left on their tenancy agreement, says MVT. That means the majority of operators have little protection from the threat of future rent increases or the property being sold for redevelopment.

Unlike private investment funds or shares in a traditional company, the Music Venue Properties fund operates as a Charitable Community Benefit Society (CCBS) – a U.K.-specific charity enterprise whereby investors become member owners of the society/fund. Through purchasing shares, investors buy a stake in the legal entity that owns the music venue, with the Music Venue Trust acting as property landlord.

Shares are non-transferable and cannot be sold or traded with other investors – although investors will be able to withdraw from the trust after a period of five years and receive back their original investment plus any interest accrued. Interest is paid out annually from year two onwards.

“It basically stops a huge corporate company from coming in, buying all the shares, and saying we own all these venues now,” says Davyd. “It keeps the venues in community hands.”

Music Venue Trust is in overall charge of the society and controls 75% of votes at general meetings, with the remainder cast by investor members. Music Venue Properties was registered with U.K. regulator the Financial Conduct Authority in July.