Tencent Music fined and ordered to end its exclusive label deals in China

Image Credit: Tencent Music

Chinese music giant Tencent Music is being forced by regulators to give up exclusive music rights in China – coupled with a hefty fine.

A competition regulator has given Tencent Music 30 days to end exclusive deals it holds with labels in China. The music giant has also been fined 500,000 yuan ($77,143) by China’s State Administration of Market Regulation.

Tencent Music, the biggest music streaming company in China, holds a number of exclusive rights to record label catalogues in the region. It must now give up the exclusive global deals, though it can keep the exclusive deals with independent artists.

Already under scrutiny for its dominance of the Chinese music market, Tencent had faced being forced to sell its three music streaming services Kuwo, QQ Music, and KuGou, a threat it has dodged.

Tencent said it would “comply with all the regulatory requirements, fulfil our social responsibilities and contribute to healthy competition in the market.” The company will have to report to the regulator for the next three years to check it is completing its obligations.

We’ve spoken a lot recently about the re-emergence of music streaming exclusives – deals between platforms and artists to release music that is available only on one streaming service. Great for the streaming company, giving the platform a unique selling point, but historically loathed by labels and government officials; by listeners, too, who resent being unable to listen to a release without signing up to another subscription.

Exclusives ebbed away around 2017 following warnings that the practice would drive up prices and after music piracy began to rocket. In 2021 however, streaming exclusives have begun to creep back, with the likes of Deezer launching exclusive covers of ‘80s songs, Kanye West’s new album Donda debuting as a livestream premiere on Apple Music. There doesn’t seem to be a return however to the purchase of rights, which means that entire official releases will be out everywhere and not just shackled to one streaming service.

Tencent Music had already began to draw back from exclusive deals – it no longer holds exclusive licensing agreement with Sony Music, for example, which allowed the company to sign a deal with NetEase Cloud Music. Tencent no longer has exclusive deals with any of the “Big Three” record labels, potentially opening up the door for a fairer market in the Chinese music industry.  

I write about music for RouteNote, sharing fun stuff, news, and tips and tricks for musicians and producers. Also a saxophonist and hater of marmalade.

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