BEIJING (CelebrityAccess) — Tencent Music announced that they have notified their “upstream copyright partners” of plans to terminate all exclusive music licensing deals “as soon as possible.”
In statement published their Chinese social media service WeChat, Tencent said: As of August 23, 2021, our company has sent relevant letters to all upstream copyright parties that have reached exclusive agreements, informing them that they need to terminate the contracts at this time.”
Tencent Music Entertainment previously secured exclusive licensing deals with major labels including Universal Music, Sony Music and Warner Music which allowed it to license music for its own platforms and to sub-license music to its rivals.
However, the deals drew scrutiny from China’s State Administration for Market Regulation who in July imposed fines of 500,000 yuan (about $70,000 USD) and gave Tencent Music 30 days to terminate its exclusive deals.
As well, Tencent may be forced to sell off two of its music streaming platforms – Kugou and Kuwo – to rivals in the market.
Additionally, Tencent will be required to provide annual updates on its compliance with the anti-trust ruling to the SAMR for the next 3 months, according to the statement published on WeChat.
According to Tencent, they will still continue to license music non-exclusively from their ‘upstream copyright partners’ and will negotiate with the upstream copyright partners on non-exclusive agreements.