Universal Music has renewed its licensing deal with Tencent Music Entertainment, which operates three streaming services and an online karaoke platform in the Chinese market. The new multi-year agreement, the two companies say in a statement, "fortifies their shared commitment to creating value for artists and exceptional experiences for music lovers".
On more practical matters, that statement explains that "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 formats".
Universal has had a longterm partnership with Tencent, which has long been a dominant player in the Chinese streaming market. Initially, like the other majors, Universal entered into an exclusivity deal with Tencent in China.
That meant Tencent also had the rights to distribute Universal's catalogue within the country, meaning any competing China-based streaming services had to negotiate a licensing deal with their main rival in order to include the major's music on their platforms.
However, under pressure from Chinese regulators, the exclusivity arrangements came to an end, with Universal announcing its first direct licensing agreement with Tencent's main competitor in China, NetEast Cloud Music, in 2020.
The commercial relationship between the wider Tencent group and Universal Music goes beyond licensing deals of course. Prior to Universal Music listing on the dutch stock exchange in September 2021, a Tencent-led consortium acquired 20% of the major. That consortium remains a significant shareholder in the publicly listed UMG.
Commenting on the new licensing deal, Cussion Pang, Executive Chairman of TME, says: “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".
Universal's EVP Of Market Development, Adam Granite, adds: “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".