Spotify and Tencent Music Entertainment Group have shared the love with each other to strengthen their relationship as 2 of the world’s most powerful streamers.
Tencent Holdings Limited, the giant Chinese holdings company and parents of Tencent Music Entertainment Group (TME), have just metaphorically shaken hands with Spotify for some equity investments. TME and Spotify will acquire new shares representing minority equity stakes in each other for cash.
Whilst TME will invest directly in Spotify, parent company Tencent will invest in Spotify through secondary purchases. This will result in Spotify owning a minority stake in TME whilst both Tencent and TME will hold a minority stake in Spotify. TME runs one of the most popular social platforms in China as well as running the largest online music service company in China.
Spotify CEO and founder, Daniel Ek said: “Spotify and Tencent Music Entertainment see significant opportunities in the global music streaming market for all our users, artists, music and business partners. This transaction will allow both companies to benefit from the global growth of music streaming.”
Cussion Pang, the CEO of TME, said: “We are excited to embark on this partnership with the largest music streaming platform in the world. TME and Spotify will work together to explore collaboration opportunities, with a common objective to foster a vibrant music ecosystem that benefits users, artists and content owners.”
In Spotify’s announcement they made it clear that these are, quote, “forward-looking statements”. This means that terms and agreements are subject to factors that are uncertain and could alter the “actual results, performance or achievements of Spotify or TME or Tencent.”
Tencent President, Martin Lau said: “We are delighted to facilitate this strategic collaboration between the two largest digital music platforms in the world. Both of us share the same commitment to bringing music and superior entertainment experiences to music lovers, and to expanding the global digital music market for artists and content partners.”