NetEase and Alibaba copyright swap deal may put an end to China’s music streaming war

China’s copyright re-licensing circle is now complete. NetEase Music and Ali Music Group announced today that they have signed an agreement to swap music copyrights in a bid to enlarge the music pool of both platforms.

NetEase Music has access to catalogs of leading music producers like EE-Media, Avex Group, Forward Music and HIM International Music Inc., who hold the copyrights from a series of hit singers in Taiwan, Japan, and the Chinese mainland.

Read more: Music streaming apps upping the ante in a crowded market

On the other hand, Ali Music Group is reciprocating with a copyright swap for the catalogs of Taiwan’s Rock Records, Korean’s S.M. and BMG. These music production firms have a rich list of highly-coveted titles from Chinese and Korean top musicians such as Jonathan Lee, Wakin Chau, Fish Leong, Super Junior, Girl’s Generation, EXO, etc.

In order to regulate the music market, China issued a ban on unlicensed music streaming in 2015, which thereafter sparked heated competition for exclusive music copyrights. For instance, NetEase’s deal with Taiwan’s leading music production company HIM International Music Inc. for less than 2,000 songs cost them a whopping RMB 150 million ($23 million), local media reported.

The country’s copyright authorities play as important a role in settling the money-burning battle as in starting it. Since last year, China’s copyright office called for major music streaming players to discuss issues confronting the industry.

Through governmental mediation, Tencent Music and Entertainment Group (TME), which owns over 75% share in the country’s music streaming market, collaborated with Ali Music Group last year. TME then reached cross-licensing agreement with NetEase Music in this February after their copyright disputes. In addition to collaboration with local firms, Tencent is also actively seeking partnerships with foreign counterparts like Spotify in preparation for its estimated $10 billion initial public offering.

Read more: How Tencent’s empire is making music pay

China’s music streaming market is becoming a field for big players. Upon completion of the current deal, a copyright alliance among China’s top music streaming players has been formed. The formation of this alliance may ease the competition to some extent, but it leaves little space for smaller players. Smaller digital music streaming app Duomi has terminated its music streaming service this week.