In late 2018, Chinese tech giant Tencent announced that it had raised around 1.1 billion USD via an IPO in the US that valued its music streaming service at 21.3 billion USD (when Spotify went public last spring, it was valued at around 28 billion USD). At the end of February, it was announced that the company was making a “strategic investment” in indie streaming rival Douban FM, a service we once praised for its “artist-first” approach. And just last week, Reuters reported that Tencent was mulling a 23 billion USD bid for “up to half” of iconic label Universal Music, home to the likes of Lady Gaga and Taylor Swift.
The moves are Tencent’s latest in China’s streaming wars and part of a bigger picture that is seeing the makers of WeChat attempt to obliterate the competition in the music sphere. But this goes beyond mere boardroom vindictiveness — the tremors are being felt across China’s music industry and even in indie circles, with a profound impact upon artists and fans.
To make sense of Tencent music investors’ relations ambitions and recent moves in the space, let’s take a look at the current music streaming landscape in China via the major players.
The Key Competitors
The biggest one is, undoubtedly, Tencent Music Entertainment Group (TME), which was founded in 2016 with the merger of Tencent Music (who owned QQ Music as well as online karaoke app KG) and China Music Corp, also known as Ocean Music, which began as a copyright agency and owned two leading streaming platforms at the time in Kugou Music and Kuwo Music.
Kugou and Kuwo were founded in the early 2000s, as was QQ Music, and taken together these platforms command a huge market share. According to its own official introduction, TME currently has overall 800 million Monthly Active Users, while also owning the rights to over 20 million songs and operating cooperation agreements with more than 200 music labels including Sony, Universal, and Warner. Kugou Music, whose slogan is “Just So Many Songs”, claims that there are more than 30 million licensed songs on their platform alone.
Tencent Music investor relations financial results don’t quite have a patent on China’s online music market just yet, however. Net-Ease Music (music.163.com) might be the most competitive of the alternatives that are still hanging in there. Founded in 2013, Net-Ease claims to have 600 million registered users and to have had 1.676 million MAU in the first month of 2019. The music platform fought its way out by building an active music community as well as the biggest user-generated content platform, where millions of music reviews and playlists are generated every day.
Having given up on their own music platform, Chinese tech behemoth Baidu invested in Net-Ease last year and helped the latter to reach a broader scope of users, as well as to cultivate more indie musicians who create original works exclusively for the platform.