Tencent buys audiobook platform startup Lazy Audio (Lanren tingshu) for $417 million

China’s Tencent Music Entertainment Group said on Friday it acquired audiobook platform Lazy Audio (“Lanren tingshu”) owned by Shenzhen Lanren Online Technology, for $417 million (2.7 billion yuan). The transaction is expected to close the deal in the first half of 2021.

As part of the agreement, the acquisition will give Tencent 100% equity in Lazy Audio, a well-established audio platform in China. The deal will be largely paid through cash and Lazy Audio’s management team will get post-acquisition equity-settled awards, Tencent said in a news release.

Founded in 2012, Lazy Audio is a comprehensive audio platform providing entertainment in the forms of audiobooks, Chinese comedy, podcasts and other radio shows to customers. It monetizes via different channels, including pay per title, subscription payment for content, and advertising. Lazy Audio has developed into a thriving community with strong user interactions and engagement, providing superior content and services to audio users across China. Lazy Audio has a highly-scalable user base, making it one of the leading audio platforms in China.

Lazy Audio currently has over 30 million monthly active users, nearly 10 million daily users, and active users are listening for about 180 minutes per day. Users are mainly young people aged 16-25, with users in first- and second-tier cities accounting for more than 30%.

“We are delighted to welcome the talented Lazy Audio team to the TME family, and expect this strategic acquisition to significantly deepen our presence in the fast-growing long-form audio industry in China,” said Mr. Cussion Pang, Chief Executive Officer of Tencent Music. “As a leading provider of audio entertainment, Lazy Audio can be seamlessly integrated into our existing long-form audio strategy, enabling us to further monetize the extensive library of high-quality literature IPs that we have access to through strategic partnerships with China Literature and others.”

“Lazy Audio’s catalog is set to expand our audio content library, and its recording capacity will significantly boost our production of audiobooks. We believe this partnership will help us cater to the increasingly nuanced needs of our customers, strengthen our brand recognition in this segment, generate considerable operational synergies, and accelerate our journey to become a leading audio entertainment platform in China.” Mr. Pang added.

The acquisition comes at a time when the music streaming site is looking to bolster its content library in order to put it behind a paywall and add more paid users.