SOURCE / COMPANIES
NetEase’s CEO encourages Chinese record companies to open up music licensing after Tencent Music announced to give up exclusivity
Published: Sep 01, 2021 10:55 AM
QQ Music. Photo: VCG

QQ Music. Photo: VCG


 
Ding Lei, CEO of NetEase, China's internet technology giant, encouraged record companies to open up licensing and jointly develop the industry in a fair and open way, according to media reports, after NetEase Music’s major competitor Tencent Music announced to give up its exclusive rights to music labels on Tuesday.

“Tencent Music has made an announcement to relinquish exclusive music rights, and we expect this to be a sincere decision,” Ding said during an earnings call on Tuesday night, the paper.cn reported. 

Moreover, Ding called on record companies to jointly create an open, fair, and healthy environment for the industry development built on open licensing. 

Tencent Music announced on its official Wechat account on Tuesday stating that the company will give up the right to exclusive licensing of music rights under the exclusive music rights agreement with the relevant upstream copyright holders, and the upstream copyright owners may license to other operators on its own without being held liable for use by third parties. 

China's State Administration of Market Regulation (SAMR) has ordered Tencent Music Entertainment Group to give up its exclusive rights to music labels in 30 days on July 24, with a 500,000 yuan ($77,150) penalty to the company, according to the document published on the site of SAMR.

This is the first case since the implementation of China's Anti-Monopoly law that demands rectification from illegal concentrations of undertakings to restore market competition, said the document. 

Tencent Music and China Music Group's market share were about 30 percent and 40 percent respectively in 2016, but Tencent Music now occupies more than 80 percent of exclusive music resources after merging with major competitors in the market, read the document. 

The total revenues of Tencent Music in the second quarter of 2021 reached $1.24 billion, an increase of 15.5 percent year-over-year, with revenues from music subscriptions reaching $277 million, up 36.3 percent year-over-year. 

Ding noted during the earnings call that the anti-monopoly penalty decision made by the state market regulator released a clear, positive and encouraging signal for the whole industry. 

Global Times
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