Cultura Voice

  Tencent and its majority-owned subsidiary, Tencent Music Entertainment (TME), are facing a potential battering in China as part of an antitrust clampdown by the nation’s regulators. Tencent was investigated a couple of years ago by anti-competitive watchdogs in China for striking exclusive licensing agreements with the three major record companies in the territory. Tencent Music’s previous deals with Universal Music, Sony Music and Warner Music, enabled TME – the owner of China’s largest music streaming services – to license the majors’ music for its own platforms, but also to exclusively sub-license these catalogs to local rivals. However, the anti-competition investigation into Tencent was paused after the firm agreed to strike differently-structured music deals. In TME’s latest licensing agreements with Universal and Warner, each announced in the past eight months, Tencent no longer possesses an exclusive sub-licensing right, allowing these companies to also strike separate di...

  The global pandemic hasn’t slowed down Tencent Music Entertainment’s acquisition strategy in music. Earlier this year, the company, which is majority-owned by China’s Tencent Holdings, acquired a minority slice of Universal Music Group via a Tencent-led consortium’s $3.4bn buyout of a 10% stake in UMG. In June, Tencent Music Entertainment (TME) also acquired its own sliver of Warner Music Group, paying around $100m for a stake worth around 0.8% of WMG. (Tencent Holdings acquired a further 0.8%.) Last month, revealed that both Tencent Holdings and TME had acquired a minority stake in the fast-growing, AI-driven A&R platform Instrumental. And today (November 19), Tencent Music has announced an additional acquisition of a minority stake in an intriguing music company – Los Angeles-based virtual concerts platform Wave. Wave blends broadcast technology and real-time gaming graphics to transform artists into digital avatars in a virtual world, through which they can play livestream...

We wrote about the London-based company’s tech spotting huge tracks by the likes of Lil Nas X, Tones & I and Arizona Zervas months before those artists signed major label deals that helped their careers take off. We wrote about Instrumental launching its internal label record label, Frtyfve, which enables it to invest early in emerging artists spotted by its own technology. And two years ago, we wrote about Instrumental raising $4m to fuel its “aggressive growth plan”. Now, that growth plan looks set to go supernova. We learned today (October 27) that Instrumental has sold a minority stake in its business to two parties: Tencent Holdings and Tencent Music Entertainment (in which Tencent Holdings, of course, is a majority owner). Little is known about the deal as you read this, although MBW understands that an official announcement is due in the coming days. Instrumental uses proprietary algorithmic tech (i.e. machine learning) combined with human intelligence to comb streaming serv...

India’s government has blocked Bytedance’s TikTok and Tencent Music Entertainment’s QQ Music from devices in the country, as it officially bans 59 Chinese-owned mobile apps. Other apps now banned in India, per a government announcement today (June 29) include Baidu’s Baidu Map and Alibaba’s UC Browser, in addition to social video app Kwai and filesharing app ShareIt. India’s Ministry of Information Technology claims that the blocked apps are “prejudicial to [the] sovereignty and integrity of India, defence of India, security of state and public order”. Relations between India and China worsened earlier this month, after 20 Indian soldiers were killed on the disputed Himalayan border with China. The Indian army claimed that these deaths were the result of a “violent face-off” with Chinese soldiers. In April, data monitor SensorTower reported that TikTok had surpassed 2 billion downloads worldwide. Its data suggested that India had been the biggest driver of this growth, with 6...

On Friday (June 12), spotted via an SEC filing that Tencent Music Entertainment (TME) had acquired 4 million Class A shares in Warner Music Group in a transaction worth around $100m. Those 4m shares equated to 5.2% of outstanding Class A shares, and 0.8% of Warner Music Group as an entire company. We’ve subsequently learned, via an additional filing also lodged with the SEC on Friday (see below), that China’s Tencent Holdings – the majority owner of TME – has itself acquired a separate stake in Warner of the same size as TME’s (4 million shares / 0.8% of Warner’s company). Tencent Holdings did so via its 100% subsidiary, Huang River Investment Ltd. Both of these transactions took place on Wednesday, June 3, the day Warner floated a portion of its company on the Nasdaq. And both of them were worth circa $100m. This means that the Wall Street Journal’s earlier report suggesting that Tencent was considering a $200m acquisition of WMG shares was right on the money. It ...

It’s interesting, when you think about it, that many of Spotify’s biggest rivals – Apple Music, Amazon Music, YouTube Music, Tencent Music – have proudly chosen to singularly define their brands with one type of content: music. Spotify, of course, is now much more than a music service. It’s “the largest audio platform in the world”. That’s how comedian Joe Rogan described SPOT when making the game-changing announcement yesterday (May 19) that one of the globe’s biggest podcasts,  The Joe Rogan Experience , is moving exclusively to Daniel Ek’s platform. From the end of this year, both audio and video versions of  The JRE  will only be available on Spotify, via a licensing deal that the Wall Street Journal suggests will cost Daniel Ek’s company over $100m. Rogan’s ‘cast is known for its sometimes fascinating, always freewheeling conversations with figures from across the spectrum of politics and celebrity. The show’s typical length runs betwee...

Resso, the music streaming app owned by TikTok parent Bytedance, has today (March 4) publicly launched in India, taking on the likes of SPOT, plus Gaana, JioSaavn and Apple Music in the market. Resso  reportedly launches in India with a split price offering: there’s a free-to-use tier which offers music streaming at 128kbps, while a paid tier is available for Rs 99 ($1.35) per month on Android and Rs 119 ($1.62) per month on iOS. Both paid options offer streaming up to 256kbps with no advertising. The launch of Resso in India has been licensed by the likes of Sony Music Entertainment, Warner Music Group, Beggars Group and Merlin, as well as large local India-based rightsholders such as T-Series, Saregama, Zee Music, Times Music and Tips. Notice a company name missing there? Yup: Universal Music Group. As TechCrunch points out, UMG is set to sell 10% of its business (possibly up to 20% over the course of time) to Tencent Holdings Ltd, following the ...

Belgium-based, independent music trade body IMPALA has said that it is ‘gearing up to oppose Tencent’s buyout of a 10% stake of Universal Music Group.’ The European organization argues that ‘the impact of such a sale would change the whole music ecosystem’, and that smaller companies will be at a competitive disadvantage. In a statement issue today (November 26), IMPALA, which represents over 4,000 independent music companies and national associations, says that it is also ‘concerned about who might buy the additional UMG stakes that are up for grabs’. Tencent Music Holdings is the majority shareholder of Tencent Music Entertainment (TME), which owns QQ Music, Kugou and Kuwo and has an estimated 90% market share of digital music in China. According to TME’s latest Q3 results, it reached a total of 35.4m paying music subscribers in the three months to end of September, while the firm’s online music services – including both streaming and downloads – generated RMB 1.85bn (US $...

The three major music companies are collectively worth more than $85 billion – and they have Tencent to thank. MBW can publish that number with more certainty than we’ve been able to in some time, thanks to last week’s news that China’s Tencent Holdings Ltd. has made a bid to acquire 10%-20% of Universal Music Group, at a company-wide valuation for UMG of €30bn ($33.63bn). By default, this approach from Tencent (run by CEO & Chairman, Ma ‘Pony Ma’ Huateng, pictured) has become the first market-tested barometer of what the strategic value of a major music company may be today. Tencent’s bid slaps a 30X multiple on UMG’s EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) profit figure for the 12 calendar months of 2018 – i.e. the last fiscal year of the music company and its French parent, Vivendi. In February, Universal confirmed its EBITA figure was €902m for this FY2018 period. In order to transition this €902m into an annual EBITDA number, we need ...

France-based media giant Vivendi will appoint “several investment banks” tomorrow (July 25) for the sale of up to 50% of its subsidiary Universal Music Group (UMG). Today’s news, reported by Reuters citing a source close to the matter, follows Vivendi’s assertion last month that it is “very confident” the UMG sale process will be ignited by the end of the year. When Vivendi initially announced its intention to sell off up to half of UMG last July, it suggested that it could possibly complete the UMG process by the end of January 2020. In May this year, a Bloomberg report suggested that Vivendi was facing difficulties in the sale process of UMG, citing sources who said that “some private equity investors balk at the high price and slow pace of the deal”. 5th Passenger (Original Motion Picture Soundtrack) by Ramin Kousha That report also revealed that Vivendi held preliminary sale talks with Tencent Holdings about making a minori...

Tencent Music Entertainment’s IPO filing with the US Securities and Exchange Commission.  It hasn’t taken us long to spot the names of the major labels… attached to some big news.According to a note in the F-1 prospectus, both Warner Music Group and Sony Music Entertainment have acquired shares in TME, for an aggregate cash consideration of approximately $200m. In exchange for their money, the two parties have divided a total of 68,131,015 ordinary shares in TME between them. The $200m deal went down yesterday (October 1). Universal Music Group is not mentioned as a recipient of shares. Sarah Eden - Album "Bleu Nuit" on Spotify Under the agreements, shares held by Warner and certain shares held by Sony will be subject to a lock-up which will expire upon the earlier of the following: the third anniversary of the completion of the IPO of TME, or on October 1, 2021 –  subject to limited exceptions. The remaining shares held by Sony will be subject to a lock-up...

How do you know when a copyright has been infringed? For years, this wasn’t even a question people asked in China because it was so obvious. The guys on the corner with carts full of bootleg CDs and DVDs, the illegal BitTorrents and download sites – all of them were wantonly and flagrantly engaging in copyright infringement. Indeed, infringement was their business model. If they weren’t offering copies of copyrighted works, nobody would be interested. Slowly but surely, though, China’s enforcement of copyright infringement has improved – in large part because large Chinese companies like Baidu and Alibaba and Tencent now control the rights to a great deal of content and  their  business models are based on people not getting such content for free somewhere else. The BAT companies have turned to Chinese agencies and courts to enforce their rights, evidenced by a concomitant surge in copyright-related litigation. We wrote about this last year in Copyright Protection in C...

Sony Music and Chinese giant Tencent are starting a label together. Liquid State has been launched in Hong Kong this week, with a core focus on EDM and electronic music across Asia. The label will also locally get involved in live touring and nightclub events. Tencent Music Entertainment (TME) is majority-owned by Chinese media giant Tencent Holdings, which currently has a market cap value in excess of US $500bn on the Hong Kong Stock Exchange. TME itself is believed to be worth in the region of $10bn. In December, TME closed a stock swap deal whereby it acquired a 10% stake in Spotify. As part of the deal, Daniel Ek’s company also took ownership of a tenth of equity in TME. In other words, Sony has just launched a label with a company part-owned by Spotify. And like Universal, Warner and Merlin, Sony is itself a minority stake holder in Spotify. Sony Music Australia CEO and Chairman Denis Handlin of Liquid State’s launch: “These are exci...

China’s popular video streaming service, iQiyi, has filed confidentially for US IPO according to IFR. Sources familiar with the plans said the company is looking to raise $1 billion by the end of Q1 or early Q2 of 2018. iQiyi has not commented on their plans for IPO. Rumors of iQiyi’s IPO have been circulating since the end of last year. In September, Bloomberg reported that iQiyi was taking its IPO to the US, which could value the video streaming service at over $8 billion. And in October 2017, IFR also reported that iQiyi had picked three banks—Bank of America, Credit Suisse and Goldman Sachs—to help manage the deal. iQiyi is a Netflix-like video streaming service currently controlled by search giant Baidu, who became the firm’s largest shareholder in 2012. In 2013, Baidu acquired PPS—another popular video streaming platform in China—for $370 million, merging the two video streaming services. After the merger, iQiyi began to expand into areas such as s...