Shenzhen-based Tencent Music, which owns the QQ Music, Kugou Music and Kuwo Music broadcast services, as well as the WeSing karaoke application, revealed the multi-million dollar purchase in a general release this morning. Tencent Music will pay 2.7 billion Chinese yuan ($416.16 million currently, although exchange rate fluctuations continue to move the exact price) for the nine-year Lazy Audio.
The $415 million tranche consists “primarily” of cash, the release states, but Tencent’s subsidiary will also provide Lazy Audio’s management with “certain post-acquisition equity-settled awards. In addition, Lazy Audio will operate independently “while being an essential component of TME’s overall long-form audio strategy. The parties expect the deal to officially close sometime in the first half of 2021, “subject to customary closing conditions.
Lazy Audio “monetizes through different channels,” according to the text, including through premium content, subscriptions and advertising, and has “strong user interactions and participation. In terms of the latter, it is worth mentioning that Tencent Music’s live concerts, promoted as TME Live, had generated more than 100 million visits up to last August, according to the company. These events of approximately one hour, said TME, emphasize the interaction between audience members and artists.
Addressing the purchase in a statement, Tencent Music CEO Cussion Pang said that Lazy Audio will deliver an extensive library of non-musical audio entertainment to Tencent Music’s applications, as well as the tools needed to accelerate in-house audio book production.
“As a leading audio entertainment provider, Lazy Audio can seamlessly integrate into our existing large format audio strategy… Lazy Audio’s catalog is configured to expand our library of audio content, and its recording capacity will significantly increase our audio book production,” said Angustia.
It recently emerged that Tencent Music, which is listed as an MTE in the United States, may be exploring the possibility of a multi-million dollar initial public offering in Hong Kong due to concerns about possible delisting in the United States.
In 2020, TME continued to sign a series of high-profile deals and revealed in November that the third quarter had brought the highest subscriber growth of any three-month period since 2016.
More broadly, the controversial Tencent conglomerate, approximately 31 percent of which is owned by South African Internet company Naspers, has quietly secured a 20 percent stake in Universal Music Group (UMG), an approximately 1.6 percent stake in Warner Music Group (WMG), and more than nine percent of Spotify.
At the time of publication, Tencent Music shares were trading at $22.25 each, up 2.5 percent from yesterday’s close and close to the all-time high of $22.48 that TME hit shortly after the market opened this morning.