ChinaMusic Corporation (CMC) and Tencent Group announced on Friday that the two will merge the digital audio businesses. Tencent will become a major shareholder of the new CMC.
The Wall Street Journal reported that Tencent will boost its stake in CMC from 16% to around 60%, citing an anonymous source from within one of the companies.
VP of Tencent and CEO of the new CMC, Peng Jiaxin, said that “Tencent’s resources will be at service to help us reach more users.” According to Peng, they will work to crack down on music piracy.
The new CMC will explore creative products and new business models to offer users a wider variety of services.
QQ Music, one of China’s leading digital music platforms that covers 800 million users, also runs the popular app Quanmin K-ge or “People’s Karaoke”. The app holds a 34.9% share of the karaoke app market, according to a Q4 2015 analysis from data research firm Analysys International.
With the merger, QQ Music is valued at USD six billion. It means that Tencent now owns the largest online music business in China.
CMC, on the other hand, has various music platforms, including Kugou and Kuwo, and has over 12 years’ experience dealing with music copyrights. It has 460 million monthly active users, according to TouTiao News.
The Music industry in China is going through rapid digitalization, especially when you consider that QQ Music sold over 20 million digital albums in about seven months, making RMB 100 million (USD 15 million), according to a Tencent announcement earlier this month.
(Top photo from Baidu Images)