Merlin Strikes Deals With Chinese Streaming Services, Bringing Independent Music to 500 Million Users

Chinese Flag
Getty Images

Chinese flag in Beijing. 

Agreements with NetEase Cloud Music, Ali Music Group's Xiami and Tencent's QQ Music, Kugou and Kuwo will reach 90 percent of all digital music users in that country.

Merlin, the global digital rights agency for the independent label sectors, announced Thursday (March 15) that it opened up a new market for its members by entering into licensing partnerships that cover five of China's digital music services: NetEase Cloud Music, Ali Music Group's Xiami, QQ Music, Kugou and Kuwo, with the latter three services all operated by Chinese internet conglomerate Tencent.

According to Merlin, these deals will create a "new path for independent music companies looking to enter the Chinese market" and reach a new audience of a 500 million people, which the agency says represents 90 percent of all digital music users in that country.

"For the first time, repertoire from the world's leading independent record labels will be legitimately available across China's five most prominent music services," said Merlin CEO Charles Caldas in a statement. "Above all, Merlin members are now uniquely positioned to benefit from a set of truly transformative partnerships that will accelerate growth in one of the world's most exciting and fast-evolving markets."

In structuring the agreements, Merlin agreed to provide high-fidelity repertoire to paying service subscribers, and delivering low-fidelity versions to users of free-to-access ad-supported tiers.

"This is a significant step forward for music licensing in China -- we are pleased to be working with Merlin as it leads the independent music community to better navigate, promote and monetize their music in China," said NetEase Cloud Music VP of international Mathew Daniel in a statement. "With the largest consumption of international music in China being via NetEase Cloud Music, this will open up a new audience base to these artists whilst introducing more great music to our users."

Moreover, according to Merlin, "each partnership is uniquely structured, with incentives to build new infrastructures to promote future growth and provide accurate usage reporting, alongside substantial marketing opportunities" for participating Merlin members. 

Added Caldas, "I am delighted that NetEase Cloud Music, Ali Music Group and Tencent Music Entertainment share Merlin's confidence and aspirations to develop a new market narrative, and to lay the foundations and infrastructures of a more open, transparent and equitable future."

"Ali Music has been focused on the development of independent music for many years, having launched pioneering initiatives such as the 'Searchlight Project' to support music creators," a spokesperson for Ali Music's copyright division said in a statement. "This deep, multi-faceted partnership between Merlin and Ali Music, covering copyright monetization, promotion of content, supporting and development of independent musicians and much more, will provide a better platform and experience for independent musicians and fans of independent music."

As part of its move to bring its members into the China music market, Merlin has partnered with music industry services company Outdustry to implement and manage these deals on an ongoing basis from their Beijing and Shanghai offices.