Image Credit: Tencent
China’s massive Tencent Music Entertainment now has joint labels with the three biggest music record labels in the world.
Earlier this week, Tencent announced that they had renewed their partnership with Warner Music Group after ten years working together. Their new licensing agreement will also include the inception of a new joint record label between the two giant music companies.
The joint label with Warner means that Tencent Music Entertainment (TME) now has joint record labels with what people call the ‘Big 3’ or the ‘Big Three’. The Big 3 are the surviving record labels from the Big Four and are made up of Sony Music, Warner Music, and Universal Music. The latest data from MIDiA shows that the major labels make up around 68.9% of the industry based on Spotify streams in 2020.
That is why Tencent’s deal is so huge. The Chinese music company already has a massive reach in China and beyond and now it has deep relationships with the largest section of the music industry worldwide. They have not only established joint-labels with the major record labels, but have also been investing into them to now own a significant portion.
In February, Tencent doubled their stake in Universal Music Group and now own 20% in total. They confirmed a $100 million stake in Warner Music Group last year after the label went public, giving them a 0.8% overall stake in Warner – certainly a less significant buy in than their position with Universal.
Whilst TME have been expanding out of China through their relationships with the huge record labels, their own stakes very much lie locally. Amongst their hugely popular music streaming apps like QQ Music, Kugou Music, and Kuwo Music, TME claims over 600 million monthly active users on their services.