Warner Music has inked a deal with Tencent in China to help it break into the rapidly expanding Asian market. The partnership with the Chinese tech giant would help make Dua Lipa and Ed Sheeran “impossible to ignore,” according to the US record label. In addition, the two companies have formed a record label to collaborate on the development of artists. Tencent has struck similar deals with competitors niversal Music and Sony Music as they try to break into China. Despite having nearly, a fifth of the world’s population, China accounted for less than 3% of record companies’ global revenues last year, which totaled $20 billion (£14.4 billion). However, thanks to the rise of streaming services such as those owned by Tencent and fellow tech giant Alibaba, it is a rapidly expanding market.
Tencent Music Entertainment (TME) is China’s biggest music industry, with QQ Music, KuGou, and Kuwo as its top three streaming platforms. Tencent will secure the rights to recordings from thousands of Warner Music artists as part of the deal, guaranteeing that their songs will continue to be available on Tencent’s dominant online music platforms. As they try to capture new streaming customers with smartphones, US music labels have been increasing their investments in Asia. Last month, Universal Music signed a deal with major K-pop record labels to help it break into the Korean market.
It also teamed up with Big Hit Entertainment, the label of South Korean supergroup BTS, to form a new record label to find and launch a new K-pop boy band. Tencent has been spending billions of dollars in the US music market, while major US record labels attempt to break into China and the Asian region. It bought a 20% stake in Universal Music, a 9% stake in Spotify, and a 2% stake in Warner Music.
