Alibaba Group Holding Ltd (NYSE:BABA) Signs Agreement With BMG, Promises To Distribute Music Online In China

Alibaba Group Holding Ltd (NYSE:BABA) is apparently scaling new heights in the digital music distribution space. It has struck up a deal pertaining to digitized music distribution across China with the popular music division or unit of Germany’s Bertelsmann, BMG. It seems that one of the giants in the ecommerce space, BABA is keen on winning the race that has beefed up with the Chinese rivals, in delivering entertainment offerings upfront.

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BABA Ties Up With BMG

As per the agreement between the two parties, Alibaba will take the wand of BMG forward and promote the latter’s artists and music across China by the virtue of its online platforms, like to Xiami music streaming, that reach out to millions of Chinese households and offices. BABA also offered to monitor and pursue actions against any sort of issues relevant to infringement of the rights pertaining to BMG’s music distribution in China. However, the companies haven’t yet disclosed the financial terms and conditions involved in this deal.

BABA’s Move Shall Add To Tencent’s Worries

Last year, BABA’s primary internet rival, TENCENT HOLDINGS ADR (OTCMKTS:TCEHY) had tied up with several global music companies. The deal went on well and in December, Tencent officials corroborated that they are into an online distribution deal exclusively with the prestigious Sony Corp (ADR) (NYSE:SNE). Prior to this, in November, Sony Music Entertainment had struck a similar distribution deal in the Chinese market, by tying up with Warner Music Group. This year, BABA’s disclosure about a purported association with BMG came as retaliation against its rival Tencent. This is ought to redefine the competition in online music distribution in China between BABA and its rival Tencent.

BABA’s Acquisitions In 2014

Alibaba has made quite a few distinctly important acquisitions to bolster its position. Last year, BABA took over a 16.5% share of Youku Tudou Inc (ADR) (NYSE:YOKU), an online video firm and also purchased stakes evaluating to 60% in a film production unit, ChinaVision Media Group and renamed it to Alibaba Pictures Group.

About the Author

Cooper is a graduated from Buffalo State College in New York with a bachelor's degree in Broadcast Journalism.

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