Alibaba, Tencent collaborate on music streaming, with potential to remake industry
The licensing between Alibaba and Tencent on music licensing may put an end to the era of free-to-stream music while reshaping the market, says analyst
In a rare move, China’s omnipresent technology giants Alibaba and Tencent have shaken hands on a music-streaming rights sharing deal.
Under the agreement, Tencent Music and Entertainment Group will sub-license music from Sony Music, Warner Music and Universal Music to Alibaba, while Ali Music Group will share with Tencent its exclusive content bought from Rock Records, the two announced on Tuesday.
Tencent’s three music-streaming apps – QQ Music, Kugou and Kuwo – are seen as having a dominant market share in China.
“Despite no disclosure of the transaction amounts, the deal appears to be on an equal footing,” said Xiong Hui, an analyst with independent research firm iResearch, adding that it will put big pressure on NetEase and smaller players in the field.
Tencent’s mobile messaging app WeChat blocked Alibaba-owned music streaming service Xiami on its platform in 2015, leaving users unable to share tracks directly with their friends. The block was later withdrawn after causing friction between the two firms.
The record labels involved are believed to be the major drivers behind the deal, said Xiong.
