The Birth of Tencent Music Entertainment

The case addresses the birth of Tencent Music Entertainment Group, China's music streaming leader. The case features two protagonists. One of them is Guomin Xie, a legally-trained senior executive at Sina.com, an early and highly influential Chinese internet company, employed in the period approximately from the beginning of that company's existence in the late 1990s until 2012. It was a highly challenging period for China's legitimate music market resulting in pervasive piracy. Among Guomin Xie's corporate responsibilities at Sina.com was acting as the head of Sina Music, a fledgling music streaming platform, which in turn enabled him to gain an extraordinary familiarity with China's struggling music market. Aided by his legal education and experience with China's imperfect copyright enforcement, he became consumed with a vision to create a major new company which would help kill the piracy cancer. The business model of the new company would combine streaming of legitimate music with exclusive ownership or rental of music copyrights. As the top management of Sina.com was not interested in pursuing Xie's vision, which would require major investments, he quit his job in 2012 and turned to entrepreneurship by founding China Music Corporation ("CMC"). He was faced immediately with three main challenges in his entrepreneurial career - (1) to enter into exclusive copyright agreements with music labels; (2) acquire two existing music streaming platforms; and (3) pursue fundraising. By September of the following year, he made good progress on the first two objectives, but still needed to close in on fundraising in order to complete challenge.