Will Tencent’s Hunger to Own the Music Business Stop at Universal and Spotify?

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Will Tencent's hunger to own the music business stop at Universal and Spotify? The latest from columnist Tim Ingham

The days of Tencent being able to sub-license the majors’ music in China might be over — but Tencent’s approach to buying a minority stake in UMG could bring other serious perks, especially for UMG artists. TME’s three services claim a music-streaming market share in China of 83.8 percent,. Should Tencent gain a direct monetary interest in the success of UMG artists, it could quickly accelerate the prospects of non-Chinese stars in the territory.

“I’m really excited about the Tencent/Universal deal — it’s an amazing potential intersection not just between two companies that are strategically aligned, but between East and West,” says Jordan Bromley, a music-specialist lawyer at Manatt, Phelps & Phillips LLP, which represents multiplatinum artists and songwriters out of Los Angeles, and takes a keen interest in the development of China’s entertainment industry.

“Should this deal go through, I imagine that Universal artists will naturally get preferential treatment [on Tencent services] based on the greater financial reward Tencent will receive when that happens. It looks like a strong synergy strategy.”My money says Tencent’s long-term strategy is, essentially, to own the international music business in China. And that it will try to do so by accumulating minority stakes in the most powerful music-related companies in the U.S. and Europe.

 

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