Guess Which Streaming Service Is Planning a $600 Million IPO?

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China is a country that has been making significant strides in the digital music space over the past few years. With a population of over 1.4 billion people and a growing music market, it is no surprise that music streaming services are looking to expand their presence in China. One such service that is looking to go public in the US is the Chinese music streaming service, China Music Corp.

According to a report by the Wall Street Journal, China Music Corp is backed by Tencent Holdings Ltd and is planning an initial public offering (IPO) in the US. The company has reportedly hired Goldman Sachs Group Inc. and Morgan Stanley to help with the IPO, which is expected to occur by the end of 2016. The funds being raised are estimated to be in the range of $300 million to $600 million.

China Music Corp’s decision to go public is not surprising given the growing competition in the online music market in China. With 650 million people online, the majority of whom are smartphone users, there is a huge potential for growth in this area. As such, the Chinese music market is becoming increasingly important to music streaming services, such as China Music Corp.

Despite the potential for growth, the overall paying subscriber numbers in China remain low due to free licensed offerings and online piracy. However, the uprise of streaming services in the market and the positive trends towards paid streaming services in the Chinese music market are encouraging.

For China Music Corp, going public in the US is a strategic move that will give the company access to a larger pool of capital that it can use to expand its operations in China and beyond. The company is likely to use the funds raised from the IPO to acquire new content and users, as well as to invest in technology and infrastructure.

The move to go public is also likely to benefit Tencent Holdings, which is one of the largest internet companies in China and owns a significant stake in China Music Corp. Tencent’s investment in China Music Corp is part of the company’s broader strategy to expand its presence in the digital music space.

In addition to China Music Corp, Tencent also owns a stake in Spotify, the world’s largest music streaming service. The partnership between Tencent and Spotify is expected to help Spotify expand its presence in China, while also giving Tencent access to Spotify’s global user base.

The digital music space in China is becoming increasingly competitive, with a number of local and international players vying for market share. However, the market is still largely fragmented, with no clear leader emerging yet. As such, there is a significant opportunity for companies that can establish a strong presence in China’s music market.

Overall, the decision by China Music Corp to go public in the US is a clear indication of the growing importance of China’s music market to the global music industry. With the right strategy and investment, companies such as China Music Corp can tap into the huge potential for growth in this market and establish themselves as leaders in the digital music space in China.

(Image by Greg Walters, Creative Commons, Attribution 2.0 Generic cc by 2.0)

3 Responses

  1. BamBoo

    I would be amazed if it actually takes off ..

    Chinese consumers want everything for free…

    OK, everyone wants everything for free.. it’s not just a Chinese thing..

    However… the sharemarket in China is just a huge casino and herd mentality kicks in and everyone scrambles to spin the wheel of fortune and try their luck in getting rich…

    So the IPO might simple be the ticket for a sharemarket rollercoaster ride…

  2. Mite Be

    Chinese recently bought Getty images and then started hiding that they bought it. THey now own decades of stock photos contributors never imagined would be sold for chickenfeed.

    Lesson? Never license your material to a broker. Every agency gets bought out by another agency.