Tencent Music’s share price enjoyed an upwards bump yesterday, as news broke that China’s State Administration of Market Regulation had suspended an investigation into the company’s licensing strategy.
The probe began early last year, according to Bloomberg, and focused on Tencent’s music-licensing deals with the three global major labels – and its subsequent sub-licensing of that music to rival streaming services in China.
“Rivals have complained that Tencent paid exorbitant fees for the initial rights and then passed those costs along to competitors. Licensing songs from Tencent Music for use in China can be twice as expensive compared with licensing directly from major labels for the rest of the world,” claimed the article. It also noted that Tencent Music has recently signed a sub-licensing deal with Bytedance, which is emerging as one of its most significant potential rivals – in music streaming as well as social.
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