Tencent Music, Kobalt Music Group Announce Licensing, Promotional Collaboration Deal

Kobalt Music Group Unveils Worldwide Publishing Deal with The Other Songs
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Despite the quickly approaching stateside ban of TikTok and WeChat – and Treasury Secretary Mnuchin’s indicating that China-headquartered, publicly traded companies will be delisted from U.S. exchanges unless they employ standardized accounting practices – Tencent Music has closed a licensing agreement with Kobalt Music Group.

Kobalt and Tencent Music officials announced the high-profile licensing contract this morning. The deal covers the entirety of Kobalt Music’s roughly 600,000-track publishing catalog and the extensive library of recordings within its AWAL record label. Moreover, the agreement includes Shenzhen, China-based Tencent Music’s four music streaming applications, Kuwo Music, Kugou Music, QQ Music, and the karaoke platform WeSing.

Additionally, the press release published by Kobalt and Tencent Music specifies that the entities will work together to spearhead promotional initiatives and discover new artists moving forward. Addressing the union in a statement, Kobalt EVP of Digital Partnerships Bob Bruderman expressed eagerness to build upon the just-announced contract: “This is a great step for our musicians, as well as their fans. We are honored to be partnering with TME, and look forward to exploring new innovative forms of business and collaboration.”

It’s been something of a busy week for Tencent Music, which unveiled a “multi-year extension” to its licensing deal with Big Three record label Universal Music Group (UMG) on Monday. Notably, the Tencent-UMG partnership also encompasses collaboration on artist-discovery and marketing efforts, including a co-founded and jointly operated music label.

Notwithstanding these developments and reports that Tencent Music’s livestream concerts had surpassed 100 million views, TME shares have experienced a clear-cut price drop in recent weeks. (The continued stock decrease is especially noteworthy given that the platform detailed a better-than-expected Q2 2020 financial performance on Monday, with paid users and revenue hiking 51.9 percent and 17.5 percent year over year, respectively.)

Having opened at nearly $16 Monday morning, the stock was trading for approximately $14.30 at the time of this writing. The figure represents Tencent Music’s lowest per-share value since early July, but is still well above the 52-week low of $9.22 per share that it touched during the domestic onset of the COVID-19 pandemic. During a conference call that coincided with the release of his company’s Q2 fiscal results, Tencent Music Chief Strategy Officer Tony Yip signaled that it’s “premature” to assume that Tencent Music will delist from the U.S. stock market.

NetEase Music, Tencent Music’s largest competitor in mainland China, has closed a fresh UMG deal of its own. Unlike TME shares – and in a possible indication that investors believe other Tencent assets (aside from WeChat) could be targeted by U.S. policies – NetEase has grown some $200 per share since mid-March, with the stock hovering around $459 presently.