NetEase Cloud Music to Report that South Korean Company SM Entertainment Refuses to Authorize Copyright

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Media outlet Sina Tech on Wednesday reported that, a source revealed that streaming service NetEase Cloud Music is planning to report to the state regulatory authorities that South Korean company SM Entertainment is refusing to open its music copyright authorization, which may involve using music copyright to maintain its monopoly in the industry.

According to the source, Netease’s issue with SM Entertainment is that the company is ignoring the explicit requirements of Chinese regulators. Even after the exclusive agreement was ordered to be dissolved according to law, SM Entertainment refused to sign the contract with any platform so as to forcibly continue the discriminatory music licensing policy and maintain high advance payment profits in China.

As early as 2017, China’s National Copyright Administration spoke with the principals of more than 20 domestic and foreign music companies. The Administration demanded companies to authorize and disseminate online music copyright and to avoid of granting exclusivity to any one online music service provider.

SM Entertainment claims to be “the top entertainment group in Asia”, and its famous pop groups include TVXQ!, Girls’ Generation, and EXO. In January, 2019, Tencent Music signed an exclusive contract with SM Entertainment, thus gaining the copyrights of the three major Korean entertainment companies. In 2018, SM Entertainment became one of Tencent Music investors, holding shares worth more than 100 million yuan ($1.56 billion).

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On July 24, the State Administration for Market Regulation issued a penalty that required companies to terminate exclusive copyright within 30 days. However, according to China Youth Daily, few platforms lifted their exclusive copyright holds. Since then, many platforms still have not yet terminated their exclusive copyright holds.