BMG, a music business subsidiary of Germany's Bertelsmann Group, has signed an exclusive online music distribution agreement for the Chinese market with Alibaba.
Under the agreement, Alibaba will become the exclusive online distributor of BMG music and artists in the Chinese market. Alibaba will sell those products on its own platforms such as Xiami.com. In addition, the Chinese e-commerce group will assume the monitoring responsibilities and take actions for BMG-related infringements in the Chinese market.
For large Internet enterprises in China, entertainment is an important asset to maintain user loyalty and prevent use loss to competitors. But neither Alibaba nor BMG released figures on the expected revenue derived from the venture.
In 2014, Alibaba's major competitor Tencent also formed similar alliance with global music companies. In December 2014, Tencent became the exclusive online distributor for Sony Music Entertainment in mainland China. In November 2014, Tencent signed a distribution agreement with Warner Music.