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Tencent ends exclusive music partnerships, bowing to regulators as rivals NetEase and Kuaishou jump in

  • Tencent Music said its exclusive licensing deals with labels had come to an end as of August 23, as ordered by China’s antitrust watchdog
  • Short video app Kuaishou struck a new deal with Warner Music this week, and music streaming rival NetEase also welcomed the move

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China's Tencent Music Entertainment Group announces that it terminated all exclusive licensing deals with copyright holders. Photo: Reuters
Iris Dengin ShenzhenandTracy Qu
Chinese tech giant Tencent Holdings’ music streaming business has announced that it terminated all exclusive licensing deals with copyright holders in accordance with a recent government mandate, removing a major obstacle for rivals in the entertainment industry.

Tencent Music Entertainment (TME) and its parent company said on Tuesday that the company had informed all partners involved in exclusive music licensing deals of the termination by August 23, and those parties were now free to license with others with the exception of some deals with independent musicians and new releases.

The Shenzhen-based company will continue to work with partners on non-exclusive deals.

In July, China’s antitrust watchdog, the State Administration for Market Regulation (SAMR), slapped Tencent with a 500,000 yuan (US$77,350) fine and ordered the company to end its exclusive music licensing deals with global record labels within 30 days. The order still allows Tencent to strike exclusive deals with independent artists that last up to three years, as well as form partnerships for new releases.

The move is part of an intensifying crackdown from Chinese regulators on the perceived antitrust behaviour of the country’s Big Tech companies. The SAMR’s order opens up an extensive pool of resources from the world’s most prolific music labels that were previously exclusive to Tencent, which owns the country’s top three music streaming apps.

Kuaishou Technology, the TikTok rival that is China’s second-largest short video platform, had already struck a new licensing deal with Warner Music Group (WMG) by Tuesday, which will make music from the label’s artists, which include globally popular names like Ed Sheeran and Coldplay, available on all of Kuaishou’s overseas products such as Kwai and SnackVideo.

Kuaishou has been rapidly expanding overseas with a variety of products. In the second quarter, overseas business accounted for about one-third of the company’s sales and marketing expenses, CEO Su Hua said last week.

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