Tencent Music Entertainment (TME), China’s dominant online music platform, said on Monday it has signed a deal with Warner Music Group (WMG) to launch a new joint venture record label.
The two companies have also renewed their multi-year licensing agreement, an extension of their original agreement more than a decade ago.
Warner Music content will continue to be available on TME’s music streaming platforms including QQ Music, Kugou Music and Kuwo Music, as well as live streaming platforms and WeSing, its online karaoke platform.
The new joint label will leverage “Warner Music’s global resources and experience in supporting artists’ careers, as well as TME’s massive influence in mainland China’s music and entertainment market,” the companies said in a press release. The firms will also develop new opportunities in music-for-business solutions and connected devices.
Tencent has similar deals with Universal Music and Sony Music Entertainment, bringing international artists to China and vice versa.
“Alongside our increased investment in artist & repertoire and marketing in Greater China, this renewed and expanded partnership means we can help make our artists impossible to ignore in one of the world’s fastest-expanding music markets,” said Simon Robson, President, International for recorded music at WMG.
New York-listed Tencent Music, controlled by Chinese tech giant Tencent Holdings Ltd, reported a robust set of fourth-quarter results for 2020, with total revenues rising 14.3% to 8.34 billion yuan ($1.28 billion) year-over-year. Paid subscribers reached 56 million, a 40.4% jump compared to 2019.
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“We demonstrated resilience and agility during and after the COVID-19 pandemic. We forged ahead with our operations, invested in technologies to customize services and introduced new products to meet the evolving demands of our users,” said Cussion Pang, CEO of Tencent Music.
TME enriched its content by expanding marketing capabilities, signing partnerships with leading rap music labels such as GOSH and 404 Rapper, as well as promoting hip-hop and Chinese ancient style music on its platforms.
Most of Tencent Music’s users are in its music streaming unit, but the biggest revenue drivers are social entertainment services that allow users to live stream concerts and shows, according to Reuters.