Tencent move creates hopes for open music
The termination of exclusive music copyright agreements by Tencent Holdings Ltd, a Chinese tech giant best known for its WeChat-killing app and game portfolio, will pave the way for the long-term healthy development of the company. music industry, industry experts said Thursday.
A free market environment of domination or control by large corporations can spawn continued innovation in online music platforms, thereby making possible a variety of personalized services and experiences for consumers, they said.
Tencent’s improvement measure is a response to the July 24 order of the State Administration for Market Regulation asking it to relinquish its exclusive rights to music labels.
The regulator’s order was in line with China’s intensified efforts to tackle unfair competition and monopoly behavior in order to restore market order.
The regulator also fined the Internet giant 500,000 yuan ($ 77,400) for its monopolistic behavior.
The market regulator said on July 24 that Tencent and its affiliates must not enter into exclusive copyright agreements with the upstream owners of those rights, while existing agreements must be terminated within 30 days.
Tencent and its music branch own more than 80% of the resources of music libraries in China, following its acquisition of China Music Corp in July 2016, which gave Tencent the power to block new entrants and create an unfair business environment. , said the regulator.
Tencent said in a statement Tuesday evening that it has informed the upstream copyright parties involved in such agreements as of August 23, and that it will continue to cooperate and engage with those parties in a non-compliant manner. exclusive.
Exceptional cases included periods of cooperation with independent musicians not exceeding three years, and the exclusive launch period for new songs not exceeding 30 days, Tencent said.
“We saw Tencent make an announcement to relinquish exclusive music rights, and we expect this to be a sincere decision,” said Ding Lei, CEO of NetEase, an Internet provider of a multitude of services and content. , during a call for results. Tuesday night.
NetEase Cloud Music, an online music streaming service owned by NetEase, is a major competitor to Tencent Music. Ding said the anti-monopoly sanction decision taken by the market regulator sent a “very clear, positive and encouraging signal to the entire industry.”
Ding called on record companies to open licenses and jointly create an open, fair and healthy environment for the development of the industry.
Tencent’s remedy will promote competition among digital music platforms and encourage them to innovate, improve services and reduce membership fees, finally bringing benefits to consumers, said Yu Zuo, director of the Center for Industrial. and Business Organization, which is part of Dongbei University of Finance and Economics.
The antitrust efforts of Chinese regulators are of great importance because they can promote the healthy development of the digital music industry and maintain a fair market environment, Yu said.
Dong Yizhi, lawyer at Shanghai-based law firm Joint-Win Partners, said exclusive music licensing is a very “controversial” model because, while it may help protect intellectual property rights, it can also hinder the innovation and healthy development of the music industry.
“Tencent’s relinquishment of exclusive rights to music labels will be good news for music creators, whose compositions will be released and released through more platforms,” said Dong.
Now, large online music and entertainment companies are expected to launch more video streaming content and services, as well as expand the diverse application scenarios of music, he said.