Tencent Music Entertainment Group and Universal Music Group Extend Multi-year Strategic Licensing Agreement

Rhea-AI Summary

Tencent Music Entertainment Group (TME) and Universal Music Group (UMG) renew multi-year strategic licensing agreement, providing TME access to UMG's music catalogue for QQ Music, Kugou Music, Kuwo Music, and WeSing, including music streaming in Dolby Atmos and high-definition formats.

Market Research Analyst

The renewal of the strategic licensing agreement between Tencent Music Entertainment Group (TME) and Universal Music Group (UMG) is a significant development within the music streaming industry. This partnership is pivotal for TME's competitive positioning in China's online music market, which is characterized by high user engagement and a growing demand for diversified content. The agreement ensures TME's continued access to UMG's extensive music catalog, which is crucial for maintaining and potentially expanding TME's subscriber base.

In assessing the market implications, this deal may bolster TME's market share and user retention by providing high-quality audio streaming in Dolby Atmos and HD formats. It also signals TME's commitment to innovation and enhancing user experience, factors that are vital in retaining a competitive edge. The focus on artist-fan interactions can lead to higher user engagement, translating into increased revenue through both subscriptions and advertisements.

For UMG, the deal facilitates the expansion of its artists' presence in the lucrative Chinese market, fostering international collaborations and potentially leading to increased global revenue streams. The emphasis on signing and supporting talent from Greater China also aligns with the broader industry trend of localization and could contribute to the discovery and promotion of regional artists on a global scale.

Financial Analyst

From a financial perspective, the strategic alliance between TME and UMG is likely to have a positive impact on TME's revenue streams, particularly in the realm of licensing fees and royalty payments. The agreement may result in a more predictable and stable revenue forecast for TME, given the long-term nature of the deal. For UMG, access to TME's large subscriber base provides a platform for monetizing its catalog, which could enhance UMG's royalty income from the Chinese market.

The partnership's focus on high-definition streaming could also necessitate further investment in technology and infrastructure from TME, which may impact short-term profitability but could yield long-term benefits in terms of user satisfaction and market differentiation. Investors should monitor the operational costs associated with these enhancements and weigh them against the potential for increased average revenue per user (ARPU).

It's important to consider the regulatory environment in China, which has seen increased scrutiny of tech companies. The successful negotiation of this deal could indicate a favorable business climate for TME, but investors should remain aware of the potential regulatory risks that could affect future profitability and market dynamics.

Music Industry Expert

The collaboration between TME and UMG reflects a broader trend in the music industry towards strategic partnerships that leverage technology to enhance music distribution and consumption. The inclusion of Dolby Atmos and HD formats in the agreement highlights the industry's shift towards high-fidelity audio, which is becoming an important differentiator as consumers seek more immersive listening experiences.

Moreover, the partnership's emphasis on creating value for artists suggests a commitment to fair compensation and support for artists' careers, which is an ongoing discussion in the music industry. By facilitating greater exposure for UMG's artists in China, the deal could lead to new revenue opportunities, such as live performances and merchandise sales, which are increasingly significant income streams for artists in the digital age.

The focus on innovative artist-fan interactions could also pave the way for new business models, such as virtual concerts or interactive fan experiences, which are gaining traction in the music industry. These initiatives could diversify revenue sources for both TME and UMG and contribute to the overall growth of the music ecosystem.

SHENZHEN, China, Jan. 3, 2024 /PRNewswire/ -- Tencent Music Entertainment Group ("TME," or the "Company") (NYSE: TME and HKEX: 1698), the leading online music and audio entertainment platform in China, and Universal Music Group ("UMG"), the world's leading music-based entertainment company, today announced the renewal of a multi-year strategic licensing agreement, fortifying their shared commitment to creating value for artists and exceptional experiences for music lovers.

Under the agreement, TME continues to have access to UMG's music catalogue for QQ Music, Kugou Music, Kuwo Music, and WeSing. The expansive partnership includes music streaming in Dolby Atmos and high-definition (HD) formats.

Cussion Pang, Executive Chairman of TME, said, "UMG has been an invaluable ecosystem partner to TME with deep mutual trust. Our diverse user demographics, large subscriber base, extensive industry insights, and advanced technologies have positioned us as a standout partner of choice. With a shared passion for music, we look forward to enriching our cooperation and strengthening our vibrant ecosystem to promote growth and prosperity."

Adam Granite, UMG's EVP of Market Development, said, "We are pleased to extend our licensing agreement with TME for the Chinese market. With our renewed focus on signing and supporting the best talent from across Greater China, 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 family of artists in China."

TC Pan, TME's Group Vice President and Head of Content Cooperation Business, added, "We are committed to offering our users the most comprehensive music content through diverse scenarios across our platform. Through our concerted efforts with UMG, we'll also explore innovative ways to facilitate artist-fan interactions while unleashing artists' creativity."

Timothy Xu, Chairman and CEO, Universal Music Greater China said, "We are delighted to extend our relationship with TME, as we continue to create new opportunities for UMG's artists to connect with the many millions of dedicated music fans here in China. UMG will continue to work with TME to bring the very best in music to these passionate music consumers, and to explore new ways to enhance their listening experiences."

About Tencent Music Entertainment

Tencent Music Entertainment Group (NYSE: TME and HKEX: 1698) is the leading online music and audio entertainment platform in China, operating the country's highly popular and innovative music apps: QQ Music, Kugou Music, Kuwo Music and WeSing. TME's mission is to create endless possibilities with music and technology. TME's platform comprises online music, online audio, online karaoke, music-centric live streaming and online concert services, enabling music fans to discover, listen, sing, watch, perform and socialize around music. For more information, please visit ir.tencentmusic.com.   

About Universal Music Group

Universal Music Group is the world leader in music-based entertainment, with a broad array of businesses engaged in recorded music, music publishing, merchandising and audiovisual content. Featuring the most comprehensive catalogue of recordings and songs across every musical genre, UMG identifies and develops artists and produces and distributes the most critically acclaimed and commercially successful music in the world. Committed to artistry, innovation and entrepreneurship, UMG fosters the development of services, platforms and business models in order to broaden artistic and commercial opportunities for artists and create new experiences for fans. For more information on Universal Music Group visit www.universalmusic.com. 

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the SEC and the HKEX. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.

Investor Relations Contact 
Tencent Music Entertainment Group
ir@tencentmusic.com
+86 (755) 8601-3388 ext. 818415

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SOURCE Tencent Music Entertainment Group

FAQ

What is the latest announcement from Tencent Music Entertainment Group (TME) and Universal Music Group (UMG)?

The two companies have renewed their multi-year strategic licensing agreement, allowing TME to continue accessing UMG's music catalogue for various music platforms.

What does the licensing agreement include?

The agreement includes access to UMG's music catalogue for QQ Music, Kugou Music, Kuwo Music, and WeSing, as well as music streaming in Dolby Atmos and high-definition formats.

Who are the key executives involved in the agreement?

Cussion Pang is the Executive Chairman of TME, Adam Granite is UMG's EVP of Market Development, TC Pan is TME's Group Vice President and Head of Content Cooperation Business, and Timothy Xu is the Chairman and CEO of Universal Music Greater China.

What are the goals of the partnership between TME and UMG?

The partnership aims to create value for artists and exceptional experiences for music lovers, as well as to facilitate artist-fan interactions and unleash artists' creativity.

What is the significance of the agreement for UMG's artists in China?

The agreement provides new opportunities for UMG's artists to connect with millions of dedicated music fans in China and to bring the best in music to these passionate music consumers.

What is the ticker symbol for Tencent Music Entertainment Group (TME) and Universal Music Group (UMG)?

The ticker symbol for Tencent Music Entertainment Group is TME and for Universal Music Group is UMG.