China’s music streaming giants are not Spotify or Apple Music, but Tencent and NetEase. The nature of Tencent’s growth has meant exclusive deals on music libraries from Sony Music Entertainment, Universal Music Group, and Warner Music Group. These exclusive deals means that competitors must sublease music from Tencent, making a case for intellectual property infringement.
One of those artists caught in this mess is Jay Chou, the “King of Asian Pop,” a Taiwanese singer. His music catalog was the “subject of a lawsuit between Tencent and NetEase over the past year. But just this past week, a Shenzhen court ruled that NetEase had to pay Tencent 850,000 yuan (US$121,500) for allowing users to download the Mandopop star’s songs.”
Court documents explain that NetEase did not continue it’s sublicensing contract in 2017 after Tencent charged twice as much as they did in the previous year for the same songs. NetEase created a problem though by, “continuing to offer Chou’s songs and notifying users to download the songs as soon as possible.” NetEase apologized and said that they had “made a serious mistake,” and will pay a fine of $121,500 to Tencent.
Forrester senior analyst Xiaofeng Wang. “Whoever owns the IP or paid for the IP has the preserved rights.”
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