Warner Music, Online Giant Tencent Strike China Distribution Deal

Linkin Park - H 2014
Chris Pizzello/Invision/AP

Linkin Park - H 2014

Tencent's enormous penetration of Chinese online market is music to Warner's ears

Linkin Park, Bruno Mars and Michael Buble will be distributed alongside Mandarin stars Jolin Tsai, JJ Lin and Jam Hsiao under a groundbreaking deal between Warner Music Group and Chinese tech giant Tencent.

Tencent, which owns the vastly popular WeChat and QQ messaging services, will distribute Warner Music's repertoire and manage new releases to all legitimate local audio services, with the exception of Chinese mobile carriers. Financial details weren't disclosed.

The partners said it was the first deal between a leading Chinese Internet provider and a major music company. The music industry in China has suffered perhaps more than most from piracy.

Warner Music said the agreement is the industry’s first-ever master distribution partnership between a major music company and a big Internet provider in China.

"Providing music fans with access to high-quality music, and the right mix of regional and global artists, will be integral to the growth of the digital music sector in China," said Stu Bergen, president of Warner Recorded Music's international business.

The entertainment industry has been agog at the rise of the big Chinese tech firms, especially the big three known as the "BAT" giants — Baidu, Alibaba and Tencent.

Warner Music China will continue to develop partnerships with Chinese mobile carriers, the group said in a statement, and Warner Music will oversee relationships with all global service providers, as well as drive all marketing and promotional activities across the region.

The partnership also covers the extension of commercial opportunities for WMG’s music across Tencent platforms, including the QQ Music streaming service.

Tencent will also provide promotional opportunities to WMG’s artists through Tencent’s video and music streaming services, mobile and PC games, and social media, like its messaging platform QQ, which currently has 820 million active users in China.

WMG recently bought Gold Typhoon’s iconic recorded music catalog and artist roster in the Greater China Region, reinforcing WMG’s strong domestic repertoire base in one of the music industry’s highest-potential growth markets.

"Since expanding our presence in China with the acquisition of Gold Typhoon, we have focused on establishing market-moving partnerships with innovative players such as Tencent, that are successfully harnessing the incredible demand for music in one of the world's most rapidly changing territories," said Bergen.

Dowson Tong, senior executive vp at Tencent, said the partnership offered Chinese fans a stream of high-quality, legitimate content.

"We are looking forward to integrating the music from WMG’s talented artists into our products and services, bringing the user experience and enjoyment to a new level," said Tong.

Warner Music China is led by Elaine Feng, and she said it was vital to find new solutions as the market continued to transform.

"Enabling a deeper engagement between artist and fan is at the heart of this partnership, and we are excited to create highly immersive music experiences that will foster the growth and enhance the vibrancy of the Chinese music market," said Feng.