The parent companies of three major Chinese online music platforms, QQ Music, Omusic and AliMusic, are investing in the three dominant entertainment firms in South Korea, YG Entertainment, S.M. Entertainment and JYP Entertainment, in an effort to leverage their considerable starpower.
QQ Music’s parent company Tencent Holdings Ltd. [HKG:0700] will invest USD30 million in YG Entertainment [KOSDAQ:122870], for a 4.5 percent in the company, becoming the company’s third-largest shareholder.
AliMusic music’s parent company Alibaba Group Holding Ltd. [NYSE:BABA] announced in February that it was buying a four percent stake in S.M. Entertainment for CNY195 million (USD29.63 million). norfloxacin lactate
Ocean Interactive (Beijing) Technology Co., the parent company of Omusic, also announced in February it had signed an exclusive music copyright cooperation agreement with JYP Entertainment and that they will set up a joint venture company together.
China’s music industry has always been huge, but due to a long history of lackadaisical efforts at copyright protection, music companies have struggled to turn a profit. Last year, China released a copyright protection policy, and QQ Music, Omusic and AliMusic, who have already hoarded a vast amount of music copyrights, stand to benefit.
While the emphasis of cooperation between the three South Korean and Chinese companies is on music, it is clear that the collaboration would not be limited to just the music industry.
“The investment in South Korean companies by Chinese film and television and Internet corporations would appear to have settled on those with a dominance in the market in regards to innovative entertainment experience, stars and cooperation,” Prof. Chen Shaofeng, vice dean of the Institute for Cultural Industries, Peking University, told Yicai. “In addition, for China the market value of the chosen partners is comparatively low and the cooperative investment is more cost effective,” he said.