BRUSSELS, Belgium (CelebrityAccess) — IMPALA, the trade association for independent music labels, announced that it plans to oppose Tencent’s plan to acquire a 10% stake in Universal Music Group with an option to acquire another 10% later.
Tencent, a relative newcomer to music streaming in North America, is the dominant player in the digital music sector in China, where it owns four out of the five top music apps. Tencent also expanding internationally, with a growing presence in multiple markets.
IMPALA also raised concern about Tencent’s licensing agreements which have come under scrutiny from Chinese competition regulators.
“Even at a low level of shareholding, we believe the risk of harm for consumers and competitors from such a transaction would be a concern because of the impact in both the digital market and the music sector, with independents being squeezed further and artists also losing out,” said IMPALA Executive Chair Helen Smith.
We would expect regulators to also be concerned about the Spotify-Tencent link. We believe it would be difficult for Tencent and other companies with power in a vertical market to acquire influence over the world’s biggest set of repertoire,” Smith added.