Trump against China: An alarm signal for the music industry

From the hook, at least for the time being: the industry Website "Music Business Worldwide describes" the situation of Universal Music, Warner Music and Spotify after the us President, Donald Trump has issued a decree against the Chinese firm byte dance and Tencent. The decree prohibits American companies after a period of 45 days to make with a byte of dance and which companies stores. In the case of Tencent, it is, apparently, currently be a little different.

Benjamin Fischer

editor in the economy.

While the Text-to-byte dance on any Connections to the company, as such, aims initially targeted by "transactions in connection with the Wechat", the popular Tencent App, the speech. This point is for the music industry is of great importance. Because Tencent holds a 10 percent stake in Universal Music, as well as 9 percent on the music-streaming service Spotify and has acquired according to the stock market return in June, shares of Warner Music.

According to the agreement with Universal's parent company, the French media group Vivendi, has the Tencent-led buyer syndicate also has an Option to purchase a further 10 per cent of the American music companies for the same price. At the beginning of the year, Universal Music has a rating of 30 billion euros.

Tencent as a key Partner

From the "Los Angeles Times" stressed an official of the White house, that the decree is aimed only on Wechat and video game companies, such as, for example, the "Fortnite"-developer Epic Games will not be affected by the decree. In this industry, Tencent has also invested wide. The question remains, how far-reaching the part vaguely-worded decree will be applied after the expiry of the 45 days of the end of the day, the conflict between America and China is developing. Alarmed, the music industry should be in any case.

Tencents global investment strategy in the field of entertainment could be put to the test, so the British industry professional Mark Mulligan on his Blog. Tencent should have to his shares in the music company, it could have serious consequences for the industry. Finally, the group had paid high prices for his investments and thus the value of investments in the field of music in General, increased. In addition to the holdings Tencent and the Western music giant, the stock market combines-listed streaming service of the Chinese.

The subsidiary of the group, Tencent Music Entertainment, dominated the Chinese streaming market, according to Mulligan, with a share of around 78 percent. 651 million monthly active users, the company announced on Tuesday. Including 47.1 million paying listeners – were in the second quarter of 2020, therefore, a growth of 51.9 per cent compared to the previous year. For comparison: Spotify was one of the recent 299 million users, of which 138 million, the paid version had subscribed to.