Tencent Music Being Investigated for Anti-Monopoly Reasons
Recently, according to Bloomberg, Tencent Music Entertainment Group (hereinafter referred to as “Tencent Music”) is being investigated by domestic anti-monopoly agencies, which may terminate the exclusive licensing agreement between Tencent Music and the world’s largest record companies, such as Universal Music Group, Sony Music Entertainment and Warner Music Group. Once terminated, it will have a significant impact on the entire online music industry.
According to the report, Tencent Music obtained exclusive copyright from the three major record companies, and then sold the content copyright to smaller competitors. Peers said that Tencent Music acquired music copyright at a high cost and passed most of the cost on to its competitors. A person familiar with the matter said that the price of licensed songs from Tencent Music in China could be twice as high as that from major record companies in other markets around the world.
Tencent Music was listed in the United States last year. It has four high-activity Music software for Chinese mobile users: QQ music, Kugou music, Kuwo music and WeSing (全民K歌). In online music business, Tencent Music is mainly profitable through paid music, content subscription and advertising. By the second quarter of 2018, the company had the largest music content library, including more than 20 million songs from more than 200 domestic and international music brands.
According to the unaudited financial report released by Tencent Music in the second quarter of 2019, Tencent Music in the second quarter maintained steady growth, with a total revenue of 5.9 billion Yuan, an increase of 31%, and the net profit was 927 million Yuan. The number of online music paying users reached a record 31 million, an increase of 33% year-on-year; the number of social entertainment paying users reached 11.1 million, an increase of 16.8%. At present, Tencent Music’s total number of paying users is second only to Spotify and Apple Music, ranking the top three in the world.
September 3, 2019
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