The world’s fourth biggest music rights company, BMG, has signed a wide-ranging digital distribution deal with one of the biggest mobile and internet e-commerce companies in the world, Alibaba in China.
BMG says the new partnership promises to accelerate revenues to the point that China will take a place in its Top 10 most lucrative markets.
Prior to the deal – struck with Alibaba’s Group’s Digital Entertainment business unit – China wasn’t even in BMG’s Top 25 territories on an income basis.
Despite a vast population in excess of 1.3 billion people piracy-riddled China is only the world’s 21st biggest recorded music market. According to the IFPI, recorded music in China generated revenues worth around US $82.6m in 2013 – less than the likes of Denmark, Belgium and Mexico.
Alibaba’s Digital Entertainment business unit will promote BMG writers and artists through channels such as its streaming apps Xiami and TTPod.
It has also pledged to monitor and take action against digital and mobile services who may infringe the rights of BMG clients.
2015 is looking like the year that industry heavyweights turned to local media giants in China to increase their income from the territory. Both Warner Music and Sony Music have signed comparable partnerships with Tencent in the territory in recent months.
BMG’s agreement includes digital rights to over 2.5m copyrights, including recordings from such artists as Scorpions, Jean-Michel Jarre, Black Sabbath, Kylie Minogue, Boyz II Men, Smashing Pumpkins and Bryan Ferry, as well as publishing rights in songs from the likes of Bruno Mars, John Legend, Robbie Williams, the Rolling Stones, Aerosmith and will.i.am..
Dora Yi, Chief Investment Officer of BMG China, said, “This is a game-changing deal for BMG. Alibaba is one of the most progressive and successful companies in China and is the ideal partner for us as we begin to unleash the potential of BMG’s catalogue here.”
Patrick Liu, President of Alibaba’s Digital Entertainment business unit, said, “We are delighted to join hands with BMG to develop a new business model that combines music with e-commerce in China’s entertainment sector. Our rich experience in big data analysis will help us lead innovation in the music industry that ultimately enhances customer experience.”
The alliance with Alibaba follows the announcement in November 2014 that BMG had struck a worldwide deal with leading Chinese independent Giant Jump to manage its music publishing and recording rights both domestically and internationally.
BMG CEO Hartwig Masuch said: “Internet and particular mobile media are quickly providing an answer to the music industry’s long time challenge of how to monetise the vast untapped potential of the Chinese market. We are delighted to link with such a powerful and dynamic partner as Alibaba.”Music Business Worldwide