Exploration Weekly - TME to Buy Back $400M of Its Shares / Maria Strong Named Acting US Copyright Register / YT Counts 800K Paid Subscribers in India

Aaron Davis -

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John Lennon

Tencent Music Entertainment’s board of directors recently authorized a share repurchase program under which it may repurchase its Class A ordinary shares, in the form of American depository shares, during a twelve-month period commencing on December 15, 2019. In other words, the company is planning to buy back up to $400 million of its shares. According to its Q3 results, TME counts 35.4 million paying music subscribers in the three months to end of September, while the firm’s online music services generated RMB 1.85 billion (US $258 million) in the quarter.

The US Copyright Office appointed Associate Register of Copyrights Maria Strong as the new acting register of copyrights effective January 5, 2020. On that day, current chief Karyn Temple will step down to take on a role as the Motion Picture Association’s global general counsel. Appointed by Librarian of Congress Carla Hayden, Strong will fill in as acting register while Hayden conducts a search for a permanent Register.

A Bloomberg report states that YouTube now has more than 800,000 paying subscribers in India across its YouTube Music Premium and YouTube Premium tiers. The service was launched in the region in March this year at 99 rupees a month for YouTube Music Premium and 129 rupees a month for YouTube Premium. The report further explains that YouTube’s subscriptions in India have been growing faster than those of other music streaming services.

On behalf of the Exploration family, we would like to thank all of you across the globe for staying with us this year, and we wish you all a happy holidays!

Now, the details...
Compiled by Heidi Seo

Exploration Weekly - December 20, 2019

Tencent Music Plans to Buy Back Up to $400 Million of Its Shares

According to a statement issued by TME on December 17, Tencent Music Entertainment’s board of directors authorized a share repurchase program under which it may repurchase its Class A ordinary shares, in the form of American depository shares, during a twelve-month period commencing on December 15, 2019. This totals up to $400 million worth of its shares. The potential move comes a year after Spotify indicated its intention to buy back $1 billion worth of its stock. It also comes a month after the announcement of TME’s Q3 results. The owner of QQ music, Kugou, and Kuwo, reached a total of 35.4 million paying music subscribers in the three months to end of September, while the firm’s online music services - including both streaming and downloads - generated RMB 1.85 billion (US $258 million) in the quarter.

Maria Strong Named Acting US Copyright Register Amid Search for Permanent Chief

The US Copyright Office has appointed Associate Register of Copyrights Maria Strong as the new acting register of copyrights effective January 5, 2020, when current chief Karyn Temple steps down. Both Strong and Temple were appointed by Librarian of Congress Carla Hayden. Temple had only stepped into the official role in March, after holding the job on an acting basis for two and a half years. She will now be leaving the Copyright Office to accept a role as the Motion Picture Association’s global general counsel. Strong was appointed to her previous role, associate register and director of policy and international affairs, in April. Now, she will serve as Acting Register while Hayden conducts a search for a permanent Register. The job includes directing the procedures and practices of the Copyright Office, establishing standards for copyright registration, and increasingly, influencing US copyright policy. Strong takes the helm at a time when copyright is becoming an increasingly contentious topic in the music industry, and as the Copyright Office is tasked with overseeing the Mechanical Licensing Collective, mandated to collect mechanical royalties under last year’s Music Modernization Act.

Report Claims YouTube has 800k Paying Subscribers in India

According to a report by Bloomberg, YouTube has more than 800,000 paying subscribers in India across its YouTube Music Premium and YouTube Premium tiers. Furthermore, YouTube’s subscriptions in India have been growing faster than those of other music streaming services, although it notes Gaana’s claim that it has more than one million subscribers, which may make it the largest music subscription service in India. YouTube launched its two paid tiers in the region in March this year. The company counts 265 million monthly active users in India. At the time of launch, it charged 99 rupees a month (about $1.40) for YouTube Music Premium and 129 rupees a month ($1.82) for YouTube Premium. Comparatively, Spotify Premium launched at 119 rupees there in February, while Apple Music, Gaana, and JioSaavn all cost 99 rupees a month. Daily, weekly, and annual subscriptions are also available in the country.

CASE Act Stalled in Senate Due to Single Holdout, Says Copyright Alliance

According to Copyright Alliance president Keith Kupferschmid, talks to pass the Copyright Alternative in Small-Claims Enforcement (CASE) Act through the Senate has been stalled when Sen. Ron Wyden (D-Ore.) requested last minute changes to the bill in early November, placing a hold that would prevent it from going to the floor for a vote. The legislation plans to create a copyright claims board within the US Copyright Office. Wyden is seeking to include a sunset provision that would end the act’s effectiveness after a specific date unless further legislative action is taken. Kupferschmid expected the bill to pass before the end of this year, giving independent creators a practical way to enforce their rights without the expense of federal copyright litigation. While the act passed the Senate Judiciary Committee in July, Wyden’s hold in November creates a delay from reaching a full vote on the Senate floor.

Tencent’s Universal Bid Needed Rescuing - But May Now Claim 30% of Music Company

According to anonymous sources speaking to Reuters, Tencent Holdings, Ltd. has been struggling to find the money to complete the transaction of buying 10% to 20% of Universal Music Group for the past six months after August, when it publicly confirmed its intention. This explains why the Chinese company - the majority owner of Tencent Music Entertainment - was reported last month to be bringing in outside investors to help fund the deal, with possible backers including Hillhouse Capital and Singapore’s sovereign wealth fund, GIC. Now, according to Reuters, Tencent has turned to GIC and “other sovereign funds” to help rescue the deal after “major buyout funds quit the negotiating table.” Most notably, Tencent, backed by a consortium of state investors including GIC, would buy a 20% to 30% stake in UMG. Talks, sources suggest, between Tencent and sovereign wealth investors “have gained traction” in recent weeks. As a result, a deal could now be worked out by the end of December, but this could slip into January.

Disney+ Lured 1 Million Subscribers from Netflix, Analyst Estimates

A new analyst report by Cowen & Co. suggests that Netflix lost 1.1 million subscribers to Disney+ during the month of November. This could mean that the streaming giant sees a churn of around 1.6 million total subscribers during the fourth quarter of 2019, a period during which both Disney+ and Apple TV+ launched. However, Cowen & Co. analyst John Blackledge notes in the report that the firm still expects Netflix to hit or exceed its fourth quarter forecast of 7.6 million subscriber additions. Disney+ was launched on November 12 in select markets, including the US, and Disney plans to roll the service out more widely around the world over the coming months. To study the impact of the service on Netflix’s subscriber base, Cowen & Co. polled 2,500 US consumers. Of those surveyed, 21% said they had signed up for Disney+, indicating that the service had amassed 24 million US subscribers in November. The study also revealed that 19.4 million respondents were dual subscribers, indicating that there was an 80% overlap between the services’ customer bases. 5.8% of Netflix members canceled their subscriptions after signing up for Disney+. According to Disney, the service had 10 million sign ups on its first day. Netflix, meanwhile, has 60.6 million subscribers in the US, and 158 million subscribers globally. It expects those numbers to grow to 61.2 million and 166 million, respectively, by the end of the year.

For the First Time, YouTube Consumption Will Inform the “Billboard 200” Albums Chart

Starting next year, the Billboard 200 chart, which tracks the nation’s most popular albums of the week based on a number of factors, including traditional sales and other digital-equivalent metrics, will incorporate video and audio data from YouTube in making its calculations. The move comes during a time where video is becoming an increasingly vital component of music consumption. The changes are planned to take effect with the chart dated Jan. 18, which will reflect album sales and streams clocked between Jan. 3 and Jan. 9. Not every video will be incorporated into the Billboard 200 rankings, only officially licensed videos, meaning user-generated videos will be excluded. In addition to YouTube, the Billboard 200 charts will integrate licensed video data from other platforms as well. This marks the first time that licensed video content will factor into the charts. YouTube and other video data will also be integrated similarly into Billboard’s genre-specific album charts for “Country,” “R&B/Hip Hop,” “Latin,” and more.

Spotify Files a US Patent Application for a “Lyric Analyzer”

Spotify first filed a US patent for a lyric analyzer in 2018, but it has now been made public only recently. There are several uses for the technology, chief among them to generate tags based on lyrics. It could also determine the explicitness indicators for a set of tracks. Tags generated this way include genre, mood, occasion, or other features. According to the patent, the lyric analyzer works by generating an n-dimensional vector relating to a set of topics extracted. Then the analyzer uses those vectors to train a classifier to determine whether each generated tag applies to a given set of tracks. Spotify explained that the technology could also be used to generate playlists for users based on a single seed song. In addition, it could help with the company’s implementation of real-time lyrics, which it is testing in several international markets after Apple made the feature available in an iOS 13 update for Apple Music.

YouTube Music Borrows Personalized Playlists from Spotify - Introducing Your Mix

YouTube Music has officially rolled out its first personalized playlists to all subscribers after a limited test. Discover Mix and New Release Mix were spotted in September, but now all users have access to them. The company is also launching a personalized playlist called “Your Mix.” Discover Mix is similar to Spotify’s Discover Weekly playlist, which is intended to introduce users to new music or tracks from artists. Spotify’s weekly mix is 30 tracks and updates on Mondays, while YouTube Music’s Discover Mix will feature 50 songs and update on Wednesdays. The New Release Mix personalized playlist will be filled with recent releases from favorite artists. YouTube Music will also include some picks the algorithm thinks you’ll like based on listening history. The idea is similar to Spotify’s Release Radar playlist, which updates every Friday. The Your Mix personalized playlist will shuffle songs and artists that you enjoy with new music and will update constantly as your listening profile changes. The more you actively like songs on the platform, the more YouTube Music’s playlists will cater to your listening interests. These personalized playlists are just the start for the service. All three playlists can be found under the “Mixed For You” section of the app on iOS and Android or the web player.

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