China's Alibaba Pacts With Bertelsmann Over Streaming Rights

Sonja Flemming/CBS
Black Sabbath are among the bands involved in the Alibaba-BMG streaming deal

The deal with BMG includes over 2.5 million songs from artists including Black Sabbath, Bruno Mars, the Smashing Pumpkins and the Rolling Stones.

China's Alibaba has agreed to distribute millions of songs by leading global artists under a deal with BMG Music Rights, a unit of Germany's Bertelsmann, using the tech giant's Xiami and TTPod apps, and the company also vowed to step up action against piracy in China.

The deal is in line with Alibaba's stated aim of becoming an online-media powerhouse, with music, film and television units. Bertelsmann, based in Guetersloh in Germany, is Europe's biggest media group.

The agreement includes digital rights to over 2.5 million copyrights, including recordings by Scorpions, Jean-Michel Jarre, Black Sabbath, Kylie Minogue, Boyz II Men, Smashing Pumpkins and Bryan Ferry, as well as rights in songs from the likes of Bruno Mars, John Legend, Robbie Williams, the Rolling Stones, Aerosmith and will.i.am.

"This is a game-changing deal for BMG. Alibaba is one of the most progressive and successful companies in China and is the ideal partner for us as we begin to unleash the potential of BMG’s catalogue here," said Dora Yi, chief investment officer of BMG China, in a statement.

The deal is the latest step in a plan unveiled 12 months ago to make China a priority territory for BMG, which is already the world’s fourth-largest music rights company just over six years after its launch in late 2008.

In November of 2014, Alibaba's rival, Tencent, signed a distribution deal with Warner Music.

Patrick Liu, president of Alibaba’s Digital Entertainment business unit, said: "Our rich experience in big data analysis will help us lead innovation in the music industry that ultimately enhances customer experience."

Alibaba raised a record $25 billion in an initial public offering in September, and has been the focus of international investor interest ever since, as they seek to leverage Alibaba's platforms in China, the world’s largest Internet market.

BMG CEO Hartwig Masuch said in a statement: "Internet and particular mobile media are quickly providing an answer to the music industry’s longtime challenge of how to monetize the vast untapped potential of the Chinese market."

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