China Music and Tencent’s QQ Music unit have jointly announced a merger of their digital music businesses. The move is designed to provide upgraded online music streaming services to users, as well as foster an industry structure built upon authorized music rights and a freemium business model in China, the partners said. The merger combines Tencent’s QQ Music service with CMC to form a new company, where Tencent will become the majority shareholder.
Tencent says it fully support the new company to develop its digital music business, paving the way for an initial public offering. Co-CEOs of CMC, Xie Guomin and Xie Zhenyu will become co-presidents of the new company. Tencent’s vice president Pang Kar Shun, Cussion, will take up the role of CEO of the new company.
QQ Music, KuGou and Kuwo will continue to manage their existing brands and operations independently. Users can access existing streaming services, as well as various products provided across these platforms. The new company will promote a freemium model built upon authorized music rights, where users can access free streaming, while artists and record companies can be rewarded for their creativity through premium service offerings.
China Music and Tencent believe this model will foster an ecosystem that facilitates the healthy development of digital music and related businesses in China, fights piracy and benefits music lovers, composers, artists, record companies and distribution platforms.
