The merging of the top three music-streaming services in China will transform Tencent into the leader of China’s online music industry.
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Tencent Holdings Ltd is merging its music-streaming business with market leader China Music Corporation in a bid to create a dominant player in China’s digital music industry.
In 2014, Tencent signed deals with Sony Music and Warner Music to exclusively distribute their content in China.
The internet giant said on Friday its QQ Music service and China Music Corporation will form a new company, in which Tencent would have a controlling stake.
While Tencent said it would fully support the business efforts of the new company, Martin Lau, president at Tencent was quoted by Reuters as saying: “The new company will be the flagship for Tencent’s digital music and related businesses”.
The deal comes as the numbers of mobile phone music listeners in China rises rapidly. Kugou is the country’s largest mobile music service, with 28% of market share. Users can enjoy existing streaming services, and have access to a broad range of fun and innovative products provided across these platforms.
It comes at a time when the number of users of mobile-music services in China came in at 449 million in the first quarter, more than the entire population of the USA, according to another news report.
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Tencent is also in talks with lenders for a loan of about US$3.5 billion to back its purchase of a majority stake in Supercell Oy from SoftBank Group Corp, sources told Bloomberg. It was reported in May that it was working with Goldman Sachs and Morgan Stanley on the IPO, which was expected to raise between $300 million and $600 million.
