In a bid to transform the current music landscape in China, tech giants Alibaba Group and Tencent have come together to a new agreement for a shared music-streaming rights deal. According to an analyst, the joint deal could end the era of free-to-stream music.
On Tuesday, staunch rivals Alibaba and Tencent have forged a new music licensing agreement that put the companies on an equal footing. Under the contract, Tencent Music Entertainment Group will sub-license music from Warner Music, Universal Music and Sony Music to Alibaba, while Ali Music Group will share with Tencent its exclusive tracks purchased from Rock Records.
Tencent currently dominates the music-streaming scene in China with three apps: Kuwo, Kuguo and QQ Music. As the transaction amount of the deal has remained undisclosed, Xiong Hui, an analyst at iResearch, speculates that the companies are on the same level.
"Despite no disclosure of the transaction amounts, the deal appears to be on an equal footing," says Hui in an interview with South China Morning Post. He adds that the record labels could be the major drivers behind the agreement.
Based on Hui's analysis, the record labels and music streaming industry are now in the best position when in it comes to ownership and distribution rights of the tracks. As a result, users will be forced to pay for music.
In a statement, Alibaba and Tencent have underscored the essence of the agreement to reshape the music industry by protecting copyright and produce high-quality, original music.