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Zen Soo

Tencent’s music arm and Swedish music-streaming company Spotify are in talks to swap stakes of up to 10 per cent ahead of both companies’ public listings next year, according to a report by The Wall Street Journal on Friday.
The deal would align Tencent Music and Spotify in future licensing negotiations with major music labels, the report said, citing unnamed sources.
As Spotify has a higher valuation than Tencent Music, that latter would make up the difference in cash so that each company would own an equal stake in the other’s operations, according to the sources.
Neither Tencent nor Spotify responded immediately to requests for comment.
Tencent Music is the dominant player in China’s music-streaming market, acquiring a controlling stake in China Music Corporation in July last year in a deal valued at about US$2.7 billion.
Music piracy increasing globally, ripped from Spotify, YouTube says recording industry group
Tencent’s stake in China Music, which owns popular music streaming services KuGou and Kuwo, means that the Shenzhen-based firm controls the three leading music-streaming services in China, including its own QQ Music.
The three services have a combined 700 million monthly active users, according to Tencent, dwarfing Spotify’s 140 million monthly active users.
But Spotify has almost four times the number of paying subscribers as Tencent Music. About 60 million, or just over 40 per cent of its users, pay for an ad-free Spotify Premium account, which allows users to download music for offline listening.
In contrast, Tencent Music’s 15 million paying users make up just over 2 per cent of its total active base.
Tencent banks on original music to become China’s Spotify
Tencent Music was also considering going public in either New York or Hong Kong in mid-2018, The Wall Street Journal reported.
Tencent, which last week hit US$500 billion in market value before dipping to US$468 billion after a stock weighting cut on the Hang Seng Index earlier this week, spun off its e-publishing business China Literature on the Hong Kong bourse in November.
In an earnings call, Tencent president Martin Lau said he did not “think spin-offs are going to be a norm” for the company, despite China Literature’s stellar debut.


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Music

Tencent Music and Spotify in talks to swap stakes ahead of public listings: report

Tencent Music and Spotify are considering a share swap. Photo: EPA

Tencent to merge QQ Music service with China Music Corp to create streaming giant

A Tencent logo at the Global Mobile Internet Conference in Beijing last year. Photo: Reuters.