Tencent Music is believed to have limited access to quality resources such as Netease Cloud Music and Shrimp Music.
British legal media MLex reported on August 12 that Tencent Music Entertainment Group is being subject to the State Administration of Market Supervision due to the exclusive copyright agreement with record companies such as Universal Music, Sony Music and Warner Music. Antitrust investigation.
According to MLex news, the survey was launched in January this year. Several companies, including Apple, Alibaba, Baidu, NetEase and Huawei, were summoned by the State Administration of Markets, because their music platforms rely on Tencent Music’s delegation of exclusive music rights.
For example, in October 2015, NetEase Cloud Music received a batch of music licenses from QQ Music through “prepaid + divided”. In September 2017, the National Copyright Administration also talked about Tencent Music, Ali Music, Netease Cloud Music, and Baidu Taihe Music’s main person in charge of copyright issues. Finally, Netease Cloud Music and Tencent Music authorized each other to achieve their exclusive works. More than 99% of the number of musical works ended.
In addition, Universal Music, Sony Music, Warner Music, etc. were also inquired by China’s anti-monopoly regulators, and were informed whether they signed an exclusive license agreement with Tencent Music to eliminate and restrict competition.
In China’s streaming music market, record companies generally only authorize a music platform to use its music content, and the latter decides whether to distribute it to its competing platform. But for competitors, Tencent’s open licensing of music copyrights is very limited.
Tencent Music’s IPO prospectus last year claimed that the company has the largest music copyright library in China. By the middle of 2018, Tencent Music had more than 20 million songs from more than 200 record companies.
Amedia Research iMedia Research statistics show that in September 2018, the monthly active user penetration rate of Tencent Music’s QQ music, cool dog music and cool music reached 25.9%, 24.29% and 9.31 respectively. %, the remaining NetEase cloud music and shrimp music are only 7.17% and 3.17% respectively.
Image Source: Ai Media Consulting
In addition, data from the same survey agency showed that three Tencent music applications accounted for the 2017 Chinese mobile phone.More than 65% of the music client downloads. But in this investigation, the regulator did not file a case against Tencent Music for abuse of market dominance, but only investigated whether the company had signed a potential monopoly agreement to exclude and restrict competition. This is the first time that the State Administration of Market Supervision has conducted a formal anti-monopoly investigation against the Internet giant.
Copyright is indeed becoming more expensive. Of course, the reasons may be more than the birth of industry giants, as well as the confusion of upstream and downstream industry chains and the expansion of market bubbles.
Netease’s 2018 annual report shows that the information cost of Netease’s “other business” in 2017 was 900 million RMB, which was more than three times that of 2016’s 266 million, including the copyright generated by Netease Cloud Music. Cost is the main driver of rising costs. The same is true in foreign countries, According to the Spotify prospectus, the cost of Spotify has been rising in the past five years since 2013, accounting for 80% to 90% of its total revenue, of which content costs account for about 75% of the total cost. .