The market for ‘paid online music’ in China is expected to grow by 59% this year to $455m according to research firm iResearch, whose prediction is quoted prominently in the Financial Times’ latest piece on China.
It focuses on the evolving dynamics of the Chinese streaming market, where the exclusive licensing deals signed by Tencent with global labels are being challenged by regulator the National Copyright Administration.
One anonymous investor is quoted claiming that Tencent “bid very high prices, way beyond what they thought they would be able to monetise, just to grab all the content for themselves” and reinforce the company’s 78% share of music-streaming revenues in China.
The piece also quotes Warner Music Group’s Stu Bergen, who provides a reminder that Tencent is “expected to do sub-licence deals with all potential internet digital music platforms on behalf of our catalogue of artists”.
As we reported when the regulator’s crackdown was originally announced, this is less about true exclusivity, and more about the terms of the sub-licensing deals that Tencent signs with its rivals tipping less in the former’s favour.
There are also some new stats: Tencent now claims 700 million monthly active users across its streaming services, and expects to have 20 million paying subscribers by the end of 2017.