Economy|Business and Economy
Tencent Music acknowledges facing higher regulatory scrutiny
Tencent Music was told by Chinese regulators to pay a fine, give up exclusive music rights and sell some music assets.
China has launched a sweeping anti-trust clampdown on its internet giants [File: Florence Lo/Reuters]
18 May 2021
Tencent Music Entertainment Group confirmed on Tuesday it is facing heightened scrutiny from Chinese regulators, adding it was “actively cooperating” with them and is committed to complying with all laws “including those related to anti-trust”.
This is the first time the Tencent group has publicly commented on the matter.
As US election nears, some Chinese firms turn away from the world
US-China tech decoupling: IMF warns of global GDP crunch
Trillion-dollar question: US-China tech tensions ratchet up
Pivot to Hong Kong: China tech giants turn to city to raise funds
Reuters reported last month that Tencent Holdings, which controls music streaming company Tencent Music, was told by Chinese anti-trust regulators to pay a fine, give up exclusive music rights and sell some of its music assets. Tencent did not comment then.
The action against Tencent came amid a sweeping anti-trust clampdown by China on its internet giants.
“In recent months, we have received increased regulatory scrutiny from relevant authorities, and have been actively cooperating and communicating with the relevant regulators,” Tony Yip, chief strategy officer of Tencent Music, told an earnings conference call.
Yip declined to comment further or predict the outcome of the talks with the regulators, but said “we are committed to comply with all relevant laws and regulations, including those related to anti-trust.”
Shares under pressure
On Monday, Sony Music Entertainment announced digital distribution agreements with Tencent Music and NetEase Cloud Music, ending an exclusive arrangement with Tencent Music.
News of the regulatory scrutiny has pressured Tencent group shares over the past month, with Tencent Music down more than 14 percent.
Tencent Music beat quarterly profit and revenue estimates on Monday, driven by strong growth in subscription and advertising revenue from its music streaming platform. But its monthly active users’ numbers fell.
The company, known as China’s Spotify, has been expanding its music library through new partnerships and multi-year licensing deals. That, coupled with efforts to diversify its content base through long-form shows and live talk shows, has helped lure more paying users as well as advertisers.
Although paying users for its music platform jumped, monthly active users (MAUs) for music and social entertainment platforms declined by 6.4 percent and 14.2 percent, respectively.
“Users have stopped growing in general; last year was a high base due to the COVID,” said Tian Hou, analyst at T.H. Capital Research.
Profit attributable to equity holders of Tencent Music rose to 926 million yuan ($143.94m) in the quarter from 887 million yuan ($137.8m) a year earlier.
Excluding items, the company earned 69 yuan ($10.7) per American Depository Share (ADS), above estimates of 55 yuan ($8.5) per ADS.
Revenue rose 24 percent to 7.82 billion yuan ($1.21bn), while analysts were expecting 7.73 billion yuan ($1.2bn), according to IBES data from Refinitiv.
China launches antitrust probe into technology giant Alibaba
Investigation is part of a push by Beijing to crack down on monopolistic behaviour among tech giants.
24 Dec 2020
What’s behind China’s Big Tech crackdown and what does it mean?
New draft rules could affect some of China’s most popular e-commerce firms, including Alibaba and Tencent.
13 Nov 2020
China to fine internet giant Tencent in antitrust blitz: Report
Tencent may be fined at least $1.5bn for not reporting details of investments and anti-competitive practices: Reuters.
29 Apr 2021
China reins in tech giants to curb push into financial system
Under new rules, firms including Tencent, ByteDance must subject themselves to tougher financial regulations.
30 Apr 2021
Kremlin says summit will not stop US trying to ‘contain’ Russia
What will public school look like for US students this fall?
Swedish PM Lofven loses historic no-confidence vote
i24News to be first Israeli channel to open office in UAE
Iran’s President-elect Raisi addresses ties to mass executions
Israeli PM says Raisi win a ‘wake up’ call over Iran nuclear deal
Pakistan’s Khan fears ‘civil war’ if no peace deal in Afghanistan
Ethiopians vote in polls overshadowed by Tigray conflict
Our Channels
Our Network
Follow Al Jazeera English:
© 2021 Al Jazeera Media Network
You rely on Al Jazeera for truth and transparency
We understand that your online privacy is very important and consenting to our collection of some personal information takes great trust. We ask for this consent because it allows Al Jazeera to provide an experience that truly gives a voice to the voiceless.
You have the option to decline the cookies we automatically place on your browser but allowing Al Jazeera and our trusted partners to use cookies or similar technologies helps us improve our content and offerings to you. You can change your privacy preferences at any time by selecting ‘Cookie preferences’ at the bottom of your screen. To learn more, please view our Cookie Policy.
Cookie preferences