Business

Tencent's JOOX Streaming Service Signs Licensing Deal With Merlin: Exclusive

Courtesy Photo

The streaming platform operates in Southeast Asia, Hong Kong and South Africa.

JOOX, the Tencent-owned music streaming platform designed for users outside China, has signed a licensing agreement with independent digital rights organization Merlin, the companies tell Billboard.

The deal with JOOX follows parent company Tencent’s multi-year licensing renewal with Merlin last November. Launched by Tencent in 2015, JOOX operates in Southeast Asia, Hong Kong and South Africa. It is part of Tencent's push to expand its global reach and challenge Western rivals such as Spotify and YouTube Music in territories including Malaysia, Indonesia and Thailand. The JOOX service includes a social karaoke feature, similar to Tencent’s China-based app WeSing.

Under the new agreement, Merlin content will be licensed to JOOX’s ad-supported and premium tiers as well as its karaoke platform. The deal also effectively gives Merlin members access to marketing and promotional activities on JOOX.

Last April, JOOX senior vp Poshu Yeung revealed the service was looking to expand to additional territories on the African continent as part of a strategy to introduce the streaming platform into relatively untapped markets, as opposed to trying to compete with entrenched competitors in the U.S. and Europe. JOOX’s karaoke element in particular is seen as a significant revenue-generator for the company; during the pandemic, use of the karaoke feature jumped between 30% and 50% in Southeast Asian countries, a result of widespread lockdowns that left the majority of citizens in those countries homebound.

Hastened by COVID-19, online karaoke platforms like JOOX and WeSing have swiftly become one of the most profitable segments for Tencent Music thanks to the use of in-app virtual gifting features. Last year, karaoke and livestreaming accounted for 71.9% of total revenue for the company, with only 28.1% coming from traditional music streaming. Tencent's inroads into new markets seems to be paying off, as the company finished out 2020 with a market capitalization just 1.5% lower than Spotify's ($51.8 billion to $52.6 billion) despite having only 51.3% of its revenue ($4.5 billion to $8.7 billion).

“JOOX always strives to bring users a wide range of music entertainment content from around the globe in different languages and genres, catering to music lovers’ various tastes,” said Yeung in a statement. “We are thrilled about our strategic collaboration with Merlin as it reinforces this goal by unlocking abundant content from hundreds of thousands of artists via Merlin’s membership for our users.”

Added Merlin CEO Jeremy Sirota, “In every deal we strike, Merlin strives for the absolute best — not only for our members, but for each of our digital partners. Our agreement with JOOX is one that expands access for our members across new markets while also driving value back to JOOX. We’re truly pleased to explore new ideas and features with them in order to help Merlin members make the most of this exciting music platform.”

Last year, Merlin welcomed 81 new members from countries including Burkina Faso, Ghana, Peru, Singapore, Slovakia and the United Arab Emirates. Its members account for over 15% of the global digital music market, representing tens of thousands of labels.