China to Order Tencent Music to Give up Music Label Exclusivity

SAMR began investigating Tencent Music in 2018 but stopped in 2019 after the company agreed to stop renewing some of its exclusive rights. (Reuters)
SAMR began investigating Tencent Music in 2018 but stopped in 2019 after the company agreed to stop renewing some of its exclusive rights. (Reuters)
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China to Order Tencent Music to Give up Music Label Exclusivity

SAMR began investigating Tencent Music in 2018 but stopped in 2019 after the company agreed to stop renewing some of its exclusive rights. (Reuters)
SAMR began investigating Tencent Music in 2018 but stopped in 2019 after the company agreed to stop renewing some of its exclusive rights. (Reuters)

China's antitrust regulator is poised to order the music streaming arm of Tencent Holdings to give up exclusive rights to music labels, two people with direct knowledge of the matter said on Monday (Jul 12).

The penalty, plus a 500,000 yuan (US$77,150) fine for misreporting the acquisition of two apps, is the culmination of an investigation by the State Administration of Market Regulation (SAMR) into Tencent Music Entertainment Group, China's dominant music streaming company, the people told Reuters.

In April, Reuters reported that the regulator was preparing to fine Tencent Holdings as part of a sweeping antitrust clamp-down on the country's internet giants, with two people saying the company should expect a penalty of at least 10 billion yuan.

The people said at the time that the gaming and social media leader was lobbying for a more lenient penalty.

Reuters could not immediately determine whether Tencent Holdings faces further antitrust penalties beyond the expected ruling on Tencent Music.

SAMR, Tencent Holdings and Tencent Music did not respond to Reuters' requests for comment on Monday.

Under the terms of the penalty, SAMR will fine Tencent Music for not properly reporting the 2016 acquisitions of competing apps Kugou and Kuwo for antitrust review, an offence capped at 500,000 yuan, the people said.

In April, Reuters reported that SAMR had told Tencent Music it may have to sell Kuwo and Kugou, but the people on Monday said it no longer faces that outcome.

Still, SAMR on Saturday said it would block Tencent Holding's plan to merge China's two biggest videogame streaming site operators - Huya and DouYu International Holdings Ltd - on antitrust grounds, confirming an earlier Reuters report.

Exclusivity
SAMR began investigating Tencent Music in 2018 but stopped in 2019 after the company agreed to stop renewing some of its exclusive rights, which normally expire after three years, two people with knowledge of the matter previously told Reuters.

Tencent Music, China's equivalent to Spotify Technology, had been pursuing exclusive streaming rights with record labels including Universal Music Group, Sony Music Group and Warner Music Group.

However, it kept exclusive rights to music from Jay Chou - one of the Chinese-speaking world's most influential artists - which it used, along with some others, as a competitive edge against smaller rivals.

China has since late last year sought to curb the economic and social power of its once loosely regulated internet giants, in a clamp-down backed by President Xi Jinping.

In April, SAMR imposed a record 18 billion yuan fine on Alibaba Group Holding, ruling the e-commerce leader had abused its dominant market position for several years.



'Fantastic Four' Wins Battle of Heroes at N. America Box Office

Pedro Pascal and Vanessa Kirby star in 'The Fantastic Four: First Steps'. Rhianna Chadwick / AFP/File
Pedro Pascal and Vanessa Kirby star in 'The Fantastic Four: First Steps'. Rhianna Chadwick / AFP/File
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'Fantastic Four' Wins Battle of Heroes at N. America Box Office

Pedro Pascal and Vanessa Kirby star in 'The Fantastic Four: First Steps'. Rhianna Chadwick / AFP/File
Pedro Pascal and Vanessa Kirby star in 'The Fantastic Four: First Steps'. Rhianna Chadwick / AFP/File

"The Fantastic Four: First Steps," Disney's hotly anticipated reboot of the Marvel Comics superhero franchise, conquered the North American weekend box office, earning $118 million and sidelining "Superman," industry estimates showed Sunday.

"Fantastic Four" -- starring actor-of-the-moment Pedro Pascal, Vanessa Kirby, Emmy winner Ebon Moss-Bachrach and Joseph Quinn ("Stranger Things') -- tells the story of a team of heroes trying to save a retro-futuristic world from the evil Galactus.

"This is an outstanding opening," said David A. Gross of Franchise Entertainment Research. "'Fantastic Four' was a modest and struggling superhero series; it just caught up with the biggest and the best."

"Superman," the latest big-budget action film featuring the iconic superhero from Warner Bros. and DC Studios, slipped to second place at $24.9 million, Exhibitor Relations said.

That puts the global take of the film, starring David Corenswet as the Man of Steel, over the $500 million mark, AFP said.

"Jurassic World: Rebirth" -- the latest installment in the blockbuster dinosaur saga -- finished in third place at $13 million. Its worldwide total stands at $672.5 million.

The Universal film, starring Scarlett Johansson, Jonathan Bailey and Mahershala Ali, takes viewers to an abandoned island research facility, where secrets -- and genetically mutated dinosaurs -- are lurking.

"F1: The Movie," the Apple and Warner Bros. flick starring Brad Pitt as a washed-up Formula One driver who gets one last shot at redemption, moved up to fourth place at $6.2 million.

"Smurfs," the latest film featuring the adorable blue creatures and starring Rihanna as Smurfette, slipped to fifth place in only its second week in theaters with $5.4 million in North American ticket sales.

"The box office is on an excellent run that started two weeks ago," Gross said.

"These are not the good old days, but 'Fantastic Four' and 'Superman' are performing extremely well. Superheroes are showing some swagger, and it's good news for the industry."