China’s Answer to Spotify Shows the Path to Actually Making Money in Streaming Music

How is QQ Music succeeding where Spotify struggles? For one, Tencent. In addition to the music streaming service, the tech and e-commerce giant also oversees a social network, a gaming platform, and the hugely popular WeChat messaging app, which has more than 700 million active users.

The company’s massive reach into the Chinese population means it has solid negotiating power with record labels, which likely helps it secure advantageous licensing agreements. (For music streaming companies, royalties paid to songwriters and labels are usually the biggest drain on revenue.) Thanks to Tencent’s size, QQ Music also has a colossal user base: 400 million monthly active users, compared to Spotify’s 100 million.

Source: Quartz

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