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Tencent Music stock price trend since March 2019, source: Sina Finance New York Stock Exchange market data
Obviously, after a period of rapid growth, Tencent Music is gradually entering a stage of slowing growth, which is also the price of growth.
As of the first quarter of this year, Tencent Music Library has included more than 35 million copyright songs from domestic and international music record companies. A large amount of capital investment has made it a strong competitive force while possessing a large number of music libraries. According to previous reports from Bloomberg, Tencent is planning to acquire a 10% stake in Vivendi SA’s Universal Music. Once the acquisition is successful, the advantages of Tencent Music in the upstream copyright field will be further released.
It is worth noting that Tencent (rather than Tencent Music) is the dominant acquisition, in order to expand the overall ecosystem of the group and integrate the “power” of copyright music with its more businesses and services. According to QuestMobile’s previously released “China Mobile Internet Online Music Industry Report”, as of July 2018, Tencent’s music exclusive users accounted for 92%. In terms of the scale of active users, its three online music applications, cool dog music, QQ music, and cool music, are also among the top three in the industry. However, in the field of competition for short video, Tencent has not seen a “tool” in the face of the growth of vibrato.
Obviously, the competitiveness gained by relying heavily on the purchase of massive copyrights needs to be released in more areas. However, this move has brought tremendous pressures while bringing in a large number of users, especially when content expenses have become a “burden”. At the same time, relying on strong capital to continuously expand copyright and market share seems to have a certain negative effect.
Recently, foreign media reported that Tencent Music is under the anti-monopoly investigation by the State Administration of Markets and Regulations because of its exclusive copyright agreement with record companies such as Universal Music, Sony Music and Warner Music. Although Tencent immediately denied the relevant rumors, a follow-up foreign user exposed a screenshot of the report from the legal consulting agency Mlex market insight. The screenshots show that Universal Music Group is participating in a regulatory investigation of China’s online music market with Chinese regulators.
Pay money to buy copyright Online music is not a revenue-generating one
Of course, the practice of Tencent’s heavy money betting on copyright has its deeper purpose. After all, copyright is the foundation of all business practices in the music industry. However, the analysis of Tencent’s new quarterly earnings report can be found