Universal signs streaming deal with Tencent
World’s largest music group looks to expand reach in China and find local artists
Universal Music has signed a licensing agreement with Tencent to stream its music into China and discover more local artists, becoming the last major western music label to reach a deal with the internet group as it looks to expand its reach in the world’s second-biggest economy.
The world’s largest music company, which is owned by French conglomerate Vivendi, also announced that it will set up a music studio in China that bears the Abbey Road name. The famous London studio, where The Beatles recorded almost all of their music, was acquired as part of Universal’s takeover of EMI and is one of its most valuable brands.
Universal follows Warner Music and Sony in partnering with Tencent, giving the Chinese conglomerate an effective monopoly on streaming of western mainstream music in its home market where more than 570m people stream music each month, according to market research firm Quest Mobile.
Tencent, which owns the country’s top-three streaming platforms QQ Music, KuGou and KuWo, says it has 15m subscribers, meaning it trails only Spotify and Apple Music in paying customers. The company has a market share of 56 per cent, according to iiMedia Research Group.
Tencent has been credited with helping to clamp down on rampant piracy in the China, making the market more appealing to western music groups.
Michael Nash, head of digital for Universal Music, said: “The digital opportunity in the China’s music market is truly extraordinary, with over half a billion people enabled with smartphones. Chinese consumers are clearly embracing licensed services, fuelling an expansion of China’s music economy.”
Cussion Pang, chief executive of Tencent Music Entertainment, added: “This strategic agreement will further strengthen our efforts in copyright protection and shift the industry towards the paid subscription model.”