Tencent’s grip on music streaming in China weakens after NetEase-Universal deal
- The pact with NetEase lets its subscribers get Vivendi-controlled Universal Music Group’s full roster
- Tencent Music Entertainment Group’s separate deal with Universal Music extends a current licensing agreement by multiple years
The move gives NetEase new ammunition in a fight against Tencent.
The pact with NetEase lets its subscribers get Vivendi-controlled Universal Music’s full roster and the two will work on ways to let customers interact with artists.
Tencent Music’s separate deal with Universal Music extends a current licensing agreement by multiple years, and the duo will establish a joint music label in China, according to a separate statement. Financial terms were not disclosed.
Universal Music, Sony Music Entertainment and Warner Music Group Corp have all sold exclusive rights to a major chunk of their music catalogues to Tencent Music, which is backed by Sony and Warner.
Competing platforms like NetEase have to “pay two to three times the reasonable cost” for content under such arrangements, NetEase chief executive William Ding Lei said on a February earnings conference call.
Tencent Music’s revenue grew 17.5 per cent in the second quarter to 6.93 billion yuan (US$981 million), beating analysts’ estimates.
“We are excited to work together in the years ahead, to help our artists continue to achieve new levels of success in China,” Sunny Chang, chairman and chief executive of Universal Music Greater China, said in the statement.