Universal Music agreement with China's Tencent

Universal's logo is known all around the World.[File photo:Agencies]

The world's largest music company, Universal, has agreed a deal to allow its content to be streamed on Tencent.

Tencent is a Chinese company that is also one of the world’s largest publishers of video games, and it has relatively recently decided to further its investments in the audio streaming market. 

The new deal will also allow Tencent the rights to sub-contract Universal's music to other Chinese companies, and to build a Chinese branch of the famous Abbey Road Studios in London.

As we reported in 2016, the company has already made significant inroads globally into the market dominance of Apple's iTunes and Spotify.

In China, the market for streamed music is enormous, with some estimates placing it at a potential size of 500 million subscribers. Apple and Spotify (which is only available in Hong Kong, but not in the rest of China) have faced strong opposition from local rival QQ music, which is highly popular and also a profitable business.

QQ music came under the umbrella of Tencent in July 2016, after a deal which saw Tencent merge with China Music Corp.

Tencent has the financial clout and local brand awareness to further grow in the music streaming market, and not just in China.

Tencent also operate the Joox music streaming service.

This news will be of concern to both Apple and Spotify. The latter firm is still the world market leader, but has never yet made a profit. With the catalogue of Universal Music within its portfolio, Tencent is certain to be a fierce rival.