Tencent is planning to further expand its streaming music reach, expanding the presence of Joox, its streaming platform in southeast Asia. While the service is currently available in Malaysia, Indonesia, Thailand and Hong Kong, Tencent has plans to launch it in at least two more countries this year, including India.
Poshu Yeung, Vice President of Tencent International Business said: “Music is very universal. Your phone is an entertainment hub, and entertainment includes only three things: movies, games and music.”
This focused model apparently seems to work and continues to broaden its monopoly in the market with its newest acquisition of China Music Corp in July 2016. Tencent now operates Joox and QQ Music, both of which have huge followings in the Asian markets. QQ Music even reported a profit mid-2016, a big milestone for a streaming music service.
According to a study by global consulting firm McKinsey, the Chinese internet giant has already topped the charts with over 50 million downloads of Joox’s music app in Hong Kong, Thailand, Malaysia and Indonesia.
Alan Lau, Head at McKinsey Digital of APAC and co-author of the study, told the South China Morning Post: “The Joox app was downloaded more than 50 million times last year, accounting for more than 50 per cent of all music-streaming app downloads in Hong Kong, Thailand, Malaysia and Indonesia”.
First launched in Hong Kong in January 2015, Joox’s ‘freemium’ app began its services in the burgeoning streaming market across Asia-Pacific offering basic free-of-charge services with more advanced paid-for features. Asia-Pacific currently accounts for only 14 percent of global digital music revenue according to Lau. McKinsey’s study estimated that Asia-Pacific has clocked up US$900 million in total music revenue in 2015, compared to US$3.3 billion in the USA.
Developed mobile connectivity over the last year has been one of the reasons for digital music consumption and the rapidly growing mobile infrastructure are significant to the demand over the next coming years. According to data from GSMA, an industry association that represents over 800 mobile network operators worldwide that come 2020, the 3G and 4G networks would account for 70 percent of total mobile connections in APAC forecasting smartphone connectivity to reach 3 billion by 2020, compared with 1.7 billion in December 2016.
Joox has the advantage of an existing market in mainland China since the advent of QQ Music. It has already tailored curation for specific markets in Asia and is expanding its local editorial teams that cater to the already fragmented and hugely varied Asian market. They are definitely running ahead offering a larger library of local and regional content including K-Pop, compare to its Western competitors.
Tencent’s QQ Music and China Music Corp, operator of the popular KuGou platform, merged their businesses in July 2016 to pave way for an initial public offering.