NetEase Cloud Music [NCM] and Tencent Music [TME] have long been the dominant music-streaming companies in China. Now they may be facing off in court, after the former sued the latter alleging unfair competition and plagiarism.

Reuters has the story, including NCM’s accusation that TME’s streaming services enabled listeners to ‘sidestep copyright protection’ and play tracks licensed by NCM. It has also alleged that TME copied ‘the design and some features of its app’ for its services.

Besides announcing the lawsuit, NCM has called for its great rival to “immediately rectify its products and businesses and stop all behaviours of unfair competition”.

You can read a Google translation of its post on the Weibo social media service here. TME has yet to comment publicly, although we’ll update this story on our website if it does today.

The lawsuit comes at a very interesting time for both companies, and the wider Chinese music streaming economy. TME ended 2021 with 615 million monthly active users across its three music services, including 76.2 million paying for subscriptions and/or digital albums.

NetEase Cloud Music, meanwhile, ended 2021 with 182.6 million monthly active users, including 28.9 million paying users. The company – under its corporate name of Cloud Village – also went public in November 2021.

All this, in a year when TME’s market cap (valuation) plunged from its March peak of $53.81bn to $11.59bn at the end of 2021; when the Chinese government banned music licensing deals that were exclusive to any individual DSP; and when according to the IFPI, China was the sixth biggest recorded music market in the world – and the third biggest for streaming.

The lawsuit also comes as another Chinese tech giant, ByteDance, launched a new music streaming service in its homeland called Qishui Yinyue, to take on the established players. If NCM and TME’s legal battle is prolonged, will it distract them enough to give ByteDance a shot at snaffling some market share? Watch this space.

Music Ally archive: NetEase Cloud Music

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