The Tencent Music and Entertainment Group (TME) and Ali Music Group are to collaborate on a copyright access swap that will enlarge the catalogs of both streaming services. This comes ahead of TME’s estimated $10 billion initial public offering.

Cooperation between Tencent and Alibaba within China is rare. But TME and Ali Music both have exclusive rights to music that the other services want to add to their offerings. TME has access to Universal, Warner, and Sony—the world’s top three record companies. It also has the rights for streaming the catalogs of YG Entertainment (South Korea), JVR Music (Taiwan) and LOEN Entertainment (Taiwan). It is granting access to these catalogs to Ali Music—more than a million tracks (in Chinese).

Ali Music is reciprocating with a copyright swap for the back catalogs of Taiwan’s Rock Records, HIM International Music, B’in Music, and Hong Kong’s Media Asia. This access to music from Hong Kong and Taiwan is believed to have been highly coveted by TME.

Users of Ali Music’s Xiami service can now listen to tracks by BIGBANG, Jay Chou and TFBOYS (whose recent concert TME used as a money maker via streaming it through seven of its apps), and TME apps users will be able to get their fix of Mayday and Yoga Lin, previously exclusive to Ali Music. Ali is retaining rights to other music that it is not sharing.

china music streaming
Top music streaming apps in China 2016-2017 (Data source: DCCI; graph by TechNode)

TME is expected to launch an IPO later this year. Tencent Holdings owns 62% of TME after merging with China Music Corporation last year and spinning off its music division. China Music Corporation brought KuGou and Kuwo streaming platforms to the merged company, meaning TME with its QQ Music now has 75% market share and over 600 million monthly active users (compared to 140 million globally for Spotify).

Copyright trading was already happening among the music streaming services. NetEase had been buying copyright access from Tencent until their copyright dispute in August, but the Ali Music and TME deal is more reciprocal.

Both companies are able to enlarge their catalogs via the deal. Ali Music is one of the smaller players in China’s fast-growing music streaming industry, while TME is the largest. Securing access to further music will no doubt help in shoring up the company’s value ahead of an IPO.

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Frank Hersey

Frank Hersey is a Beijing-based tech reporter who's been coming to China since 2001. He tries to go beyond the headlines to explain the context and impact of developments in China's tech sector. Get in...

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