Bulletin: Tencent Music Plays On Despite Regulatory Actions

HONG KONG (S&P Global Ratings) July 27, 2021--Lower costs and self-developed content could somewhat offset the effects of the Chinese competition watchdog's decision to force online music provider Tencent Music Entertainment Group (TME) to end exclusive music licensing deals, S&P Global Ratings said today. Even before the ruling, which may cause near-term pricing pressure for the China-based company, TME (A/Stable/--) was already converting its agreements with top music labels from master licenses to non-exclusive agreements, in line with the regulator's push to curb TME's dominance of online music streaming. The regulatory action could affect TME's content leadership, although the company has been creating its own content and collaborating with other subsidiaries of its parent company, Tencent Holdings Ltd. (Tencent), to

...July 27, 2021 HONG KONG (S&P Global Ratings) July 27, 2021--Lower costs and self-developed content could somewhat offset the effects of the Chinese competition watchdog's decision to force online music provider Tencent Music Entertainment Group (TME) to end exclusive music licensing deals, S&P Global Ratings said today. Even before the ruling, which may cause near-term pricing pressure for the China-based company, TME (A/Stable/--) was already converting its agreements with top music labels from master licenses to non-exclusive agreements, in line with the regulator's push to curb TME's dominance of online music streaming. The regulatory action could affect TME's content leadership, although the company has been creating its own content and collaborating with other subsidiaries of its parent company, Tencent Holdings Ltd. (Tencent), to create music content. This strategy aims to mitigate such risks and increase differentiation relative to its peers. TME remains a highly strategic subsidiary...

Bulletin