Tencent Music Entertainment and Universal Music Group have announced a multi-year extension of their licensing agreement, alongside a new JV.
UMG has also signed a direct licensing agreement with NetEase Cloud Music, a rival to Tencent platforms.
The announcement follows the halting of a competition probe by the Chinese authorities into the exclusive licensing deals by the majors with Tencent Music Entertainment, which then sub-licensed catalogues to other services.
Parent company Vivendi recently finalised an agreement for a 10% stake in UMG for a consortium led by Tencent Holdings.
According to a statement, the new joint venture label between UMG and TME will be “dedicated to reaching audiences across China through cultivating, developing, producing, and showcasing highly talented domestic artists and their premium original music”.
With the extension of the licensing agreement, TME will continue to distribute music from UMG labels and artists on its platforms, including QQ Music, Kugou Music and Kuwo Music. UMG’s content will also be licensed for use on TME’s online Karaoke platform, WeSing, along with other live streaming and expanded digital services.
Under the existing partnership, TME has promoted UMG’s music to hundreds of millions of music fans. The two companies have also collaborated on music product innovations, including online music shows and videos.
Adam Granite, UMG’s London-based EVP of market development, said: “We are pleased to extend and evolve our licensing agreement with TME for the Chinese market. We look forward to working together with TME to help create compelling new experiences for fans across all TME platforms, and to expand on the opportunities available to UMG’s global and domestic family of artists in China.”
Cussion Pang, TME’s CEO, said, “I am delighted to announce this landmark win-win strategic cooperation with Universal Music Group. Supported by our hundreds of millions music lovers, powerful promotional channels, extensive user insights, as well as well-rounded digital music services, we have been a valuable partner for the industry to engage with music lovers. Through this partnership expansion, we look forward to cultivating the growth of the dynamic and expanding music entertainment industry in China, taking our shared love and pursuit of new music, to new levels that will benefit all.”
Through this partnership expansion, we look forward to cultivating the growth of the dynamic and expanding music entertainment industry in China
Cussion Pang
Sunny Chang, Universal Music Greater China’s chairman and CEO, said: “The extension of this agreement provides our roster of artists access to significant further opportunities in China, building on new momentum in the Chinese music market. China has grown to become one of the world’s leading music markets, driven by the adoption of streaming by more and more Chinese music fans. UMG is excited to continue working together with TME to continue to deliver UMG artists and their music to this rapidly growing population of passionate music consumers. Furthermore, we look forward to working with TME together on our new music label in China to develop talented artists and bring their original music to a global audience.”
TC Pan, TME’s group VP of content cooperation, said: “Universal Music Group and TME are excited to share the same passion and vision when it comes to the music industry. Together we can build an international pioneering music label to produce new music loved by the younger demographic, bringing in iconic music stars, innovative music works, and more breakthrough music genres to the global music market, ultimately providing music fans in China and around the world with a spectacular music entertainment experience.”
The licensing deal between UMG and NetEase was also welcomed by both companies.
William Ding, CEO of NetEase, said: “The partnership further strengthens NetEase Cloud Music’s position as a go-to platform for high-quality international music and marks a great step forward for China’s music industry as a whole.
“As leaders in music-based entertainment, UMG and NetEase Cloud Music share a commitment to encouraging creativity and innovation, respecting the power of artistry and exploring wider opportunities for the appreciation and enjoyment of the world’s most iconic, edgy and influential music. We are confident that the partnership will bring wider choice not only for music lovers and artists, but also for the industry.”
Granite said: “We are delighted to enter into this licensing agreement with NetEase Cloud Music in China, and look forward to working together to create new opportunities for UMG’s domestic and international artists to reach music fans, and premium subscribers across the country through NetEase.”
Chang added: “At UMG, we are committed to delivering premium listening experiences to music fans in China for our domestic and international artists. Through this agreement with NetEase Cloud Music, we can only build upon the many great successes that we have accomplished together across the platform. We are excited to work together in the years ahead, to help our artists continue to achieve new levels of success in China.”
NetEase Cloud Music subscribers will be able to access music on demand from UMG’s full roster of artists, catalogue, distributed labels.
NetEase Cloud Music and UMG will also work together to create campaigns and initiatives that will allow music fans in China to engage with both domestic artists from China and UMG’s international talent from around the world. The agreement will also increase the scope of premium offerings and experiences available to music fans in China via NetEase Cloud Music.
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