Tencent loses last major exclusive music licensing deal as NetEase, Sony seal distribution pact
- NetEase has struck a streaming deal with Sony Music Entertainment, which previously had an exclusive deal with Tencent Music Entertainment
- Tencent’s music arm says it has been facing regulatory scrutiny from government authorities
Sony Music Entertainment announced on Monday “a direct digital distribution relationship” with NetEase Cloud Music, a unit of Chinese video games giant NetEase, to effectively end an exclusive licensing deal in mainland China with Tencent Music Entertainment (TME).
Under the agreement, NetEase will make Sony Music tunes available to mainland Chinese users and explore other areas of collaboration, including music vlogs – or what it calls Mlogs – and online karaoke with smartphones.
Sony Music also said it has agreed to a “multi-year extension” of its digital distribution deal with TME.
New York-based Sony Music is the last of three major international labels, including Universal Music Group and Warner Music Group, to end exclusive licensing deals with TME.
In August last year, NetEase and Universal Music announced a multi-year licensing agreement. Three months earlier, the Hangzhou-based tech firm expanded its portfolio to provide music from Warner Chappell, the global music publishing arm of Warner Music Group.
For years, TME had paid hefty fees to maintain exclusive deals with the three global labels, which gave it a huge advantage over rivals and led to complaints from smaller firms, some of which failed to survive the industry’s expensive fight for copyrights.