The giant of online music, Spotify, has allied with its Chinese rival Tencent thanks to an agreement whereby each company will acquire a minority share of or. The two companies have not revealed that percentage of participation have exchanged, although last week Wall Street Journal, which has already advanced operation, pointed out that it would be approximately 10% of each.Learn More
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In addition, agreement will boost both services in ir international expansion plans. Thus, alliance will serve as a support point for Spotify's plans to disembark in China, while for Tencent Music is a platform to enter main markets of Spotify, leader in Europe and USA.
With some 140 million users, of which 60 are paid, Spotify has become largest streaming music service in world, being present in more than 60 countries, although among m re is still Asian giant. "The operation will enable both companies to benefit from global growth of streaming music," noted Daniel Ek in a statement.Outlet to Bag
The agreement arrives in full preparations of Spotify to go out to quote to Bolsa, a OPV planned for next year. In turn, Tencent also last ir landing in stock market. Recently, company founded by Daniel Ek, was valued at about 16 billion dollars, although some analysts raise ir possible valuation up to 20 billion.
Tencent Holding holds a majority stake in TME, which is dominant player in Chinese streaming market with music service providers QQ Music, KuGou and Kuwo. "TME and Spotify will work toger to explore collaborative opportunities," said TME Executive President Cussion Pan.
Despite increasing popularity of Spotify, accounts still do not get out. In 2016, Swedish company doubled its users, but also multiplied its losses. The music platform in streaming lost 539 million euros last year, compared to 231.4 million red numbers of 2015, despite ir earnings were shot 52% to 2.93 billion euros, thanks to growth in a 71% of payment users. These heavy losses are largely due to an increase in financial costs, according to Wall Street Journal.