Universal sign two deals with major companies Tencent and NetEase, showing a positive move towards fairness for streaming in China.

Universal have signed deals with two Chinese companies, massive in the online streaming market. Chinese entertainment and technology conglomerate Tencent, as well as Chinese technology company NetEase. Tencent Music Entertainment reached 657m Monthly Active Users on mobiles in Q1 2020. NetEase Cloud Music gained over 800m registered users by the end of 2019.

Tencent bought a 10% stake in UMG for $3.4bn earlier this year. The new announcement from Universal Music Group shows a continuation of their licensing deal, which makes their content available on Tencent owned streaming platforms such as QQ Music, Kugou Music and Kuwo Music, as well as karaoke platform WeSing.

UMG and Tencent Music Entertainment also announced they will be launching a new joint venture record label. This is not new for Tencent, after they launched a joint venture electronic music label with Sony Music called Liquid State in 2018.

The new label will be dedicated to reaching audiences across China through cultivating, developing, producing, and showcasing highly talented domestic artists and their premium original music.

Universal Music Group and Tencent Music Entertainment

Through this extended partnership, UMG and TME will further explore and expand their shared commitment to continued growth across the music market in China, in order to provide value for artists and great experiences for music fans.

Universal Music Group and Tencent Music Entertainment

We are pleased to extend and evolve our licensing agreement with TME for the Chinese market. We look forward to working together with TME to help create compelling new experiences for fans across all TME platforms, and to expand on the opportunities available to UMG’s global and domestic family of artists in China.

Adam Granite, EVP of Market Development, UMG London

I am delighted to announce this landmark win-win strategic cooperation with Universal Music Group. Supported by our hundreds of millions music lovers, powerful promotional channels, extensive user insights, as well as well-rounded digital music services, we have been a valuable partner for the industry to engage with music lovers. Through this partnership expansion, we look forward to cultivating the growth of the dynamic and expanding music entertainment industry in China, taking our shared love and pursuit of new music, to new levels that will benefit all.

Cussion Pang, Chief Executive Officer, TME

The extension of this agreement provides our roster of artists access to significant further opportunities in China, building on new momentum in the Chinese music market. China has grown to become one of the world’s leading music markets, driven by the adoption of streaming by more and more Chinese music fans. UMG is excited to continue working together with TME to continue to deliver UMG artists and their music to this rapidly growing population of passionate music consumers. Furthermore, we look forward to working with TME together on our new music label in China to develop talented artists and bring their original music to a global audience.

Sunny Chang, Chairman and CEO, Universal Music Greater China

Universal Music Group and TME are excited to share the same passion and vision when it comes to the music industry. Together we can build an international pioneering music label to produce new music loved by the younger demographic, bringing in iconic music stars, innovative music works, and more breakthrough music genres to the global music market, ultimately providing music fans in China and around the world with a spectacular music entertainment experience.

TC Pan, Group Vice President of Content Cooperation, TME

Alongside Universal’s announcement with TME, UMG also signed a deal with Tencent’s competitor NetEase Cloud Music.

Tecent’s sub-licensing of UMG’s content in China is somewhat controversial, as it leads Tencent rivals to have to negotiate licensing deals with Tencent in order to gain access to UMG content. Chinese regulators have expressed concern over this in recent years. Last February, NetEase CEO claimed they had been overpaying for content via Tencent.

UMG and NetEase’s new deal is a good sign, as it shows willingness for Universal to work directly with Tencent competitors.

NetEase Cloud Music and UMG will also work together to create innovative campaigns and initiatives that will allow music fans in China to engage with both domestic artists from China and UMG’s international talent from around the world.

Universal Music Group and NetEase Cloud Music

The partnership further strengthens NetEase Cloud Music’s position as a go-to platform for high-quality international music and marks a great step forward for China’s music industry as a whole. As leaders in music-based entertainment, UMG and NetEase Cloud Music share a commitment to encouraging creativity and innovation, respecting the power of artistry and exploring wider opportunities for the appreciation and enjoyment of the world’s most iconic, edgy and influential music. We are confident that the partnership will bring wider choice not only for music lovers and artists, but also for the industry.

William Ding, CEO, NetEase, Inc.

We are delighted to enter into this licensing agreement with NetEase Cloud Music in China, and look forward to working together to create new opportunities for UMG’s domestic and international artists to reach music fans, and premium subscribers across the country through NetEase.

Adam Granite, EVP of Market Development, UMG London

At UMG, we are committed to delivering premium listening experiences to music fans in China for our domestic and international artists. Through this agreement with NetEase Cloud Music, we can only build upon the many great successes that we have accomplished together across the platform. We are excited to work together in the years ahead, to help our artists continue to achieve new levels of success in China.

Sunny Chang, Chairman and CEO, Universal Music China