• Bruno Mars

Bruno Mars (Photo : Reuters)

Warner Music Group (WMG) had signed a distribution deal with Tencent Holding Ltd., the Chinese Internet conglomerate confirmed on Nov. 13. The deal allows fans in China to stream licensed music from WMG, Reuters reported.

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The deal allows Tencent to use its social networks, PC and mobile games and video service to help promote WMG artists, including "When I Was Your Man" singer Bruno Mars, rapper T.I., "I'm Yours" hit maker Jason Mraz, Linkin' Park, Ed Sheeran, Jason Derulo, Josh Groban and Sheryk Crow, among many others.

Aside from WMG, major record companies Sony and Universal also see the potential to make money in China with the rise of streaming services owned by Chinese Internet groups including Tencent, Alibaba and Baidu, which runs the biggest search engine in the country.

Tencent has yet to disclose its revenue from its music business, which includes its QQ Music streaming service.

It has been revealed, however, that QQ Music is under Tencent's social network group, which contributed approximately 25 percent of total revenues for the third quarter. This means a 47-percent increase from 2013.

As one of China's longest established music services, Tencent's QQ Music competes with Baidu and Alibaba, which has obtained stakes in streaming companies Youku Tudou, Xiaomi and TTPOD.

While the terms of the deal were also yet to be disclosed, WMG and Tencent released a statement saying that the deal will give consumers better access to licensed music, which would be beneficial to music artists and companies alike.

According to WMG international operations head Stu Bergen, the record label can deal with the complexity of the music market by distributing music in China by means of "a powerful and innovative partner" as there is "an incredible opportunity" in the country, CNBC reported.

For Informa music analyst Simon Dyson, the sub-licensing deal between WMG and Tencent makes good sense, describing the latter as "a big company that knows how to operate" in China.