{"id":93927,"date":"2020-10-28T15:44:10","date_gmt":"2020-10-28T15:44:10","guid":{"rendered":"https:\/\/www.musicbusinessworldwide.com\/?p=93927"},"modified":"2020-10-28T15:45:21","modified_gmt":"2020-10-28T15:45:21","slug":"tencent-confirms-taking-minority-stake-in-ai-driven-ar-platform-instrumental","status":"publish","type":"post","link":"https:\/\/www.musicbusinessworldwide.com\/tencent-confirms-taking-minority-stake-in-ai-driven-ar-platform-instrumental\/","title":{"rendered":"Tencent confirms buying minority stake in AI-driven A&R platform Instrumental"},"content":{"rendered":"

Yesterday (October 27), MBW discovered<\/a> that data-driven A&R platform Instrumental has sold a minority stake in its business to Tencent Holdings and Tencent Music Entertainment (in which Tencent Holdings, of course, is a majority owner).<\/p>\n

Little was known about the deal at the time of writing,\u00a0 but an official confirmation of the partnership has now been issued.<\/p>\n

According to the press statement, the transaction will result in Tencent and TME holding a minority stake in Instrumental’s business, alongside UK venture builder Blenheim Chalcot and Warner Music UK Limited, both existing investors in Instrumental. (Warner acquired a stake<\/a> in Instrumental in 2015).<\/p>\n

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Alongside the financial investment, the deal sees Instrumental enter into an exclusive distribution partnership with Tencent Music Entertainment Group in China, one of the world\u2019s fastest growing music markets.<\/p>\n

The deal will benefit the roster of independent artists licensing tracks into Instrumental’s frtyfve branded label services and publishing arm.<\/p>\n

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Artists direct or DIY artists is the fastest growing sector of the global recorded music industry, worth $873m in 2019 and expected to top $1bn in 2020, according to industry analysts Midia Research.<\/p>\n

Instrumental\u2019s platform is used by all three major labels, Live Nation and a range of brands and media companies to scout new prospects for their businesses.<\/p>\n

\u201cWe are incredibly excited about our new strategic investors, Tencent and TME, and the opportunity we now have to achieve great things together.”<\/p>\n

Conrad Withey, Instrumental\u00a0<\/span><\/p><\/blockquote>\n

Instrumental CEO, Conrad Withey, said: \u201cWe are incredibly excited about our new strategic investors, Tencent and TME, and the opportunity we now have to achieve great things together.<\/p>\n

“Like us, Tencent have identified the power and potential of data science in the discovery and development of high potential new artists.<\/p>\n

“I am looking forward greatly to collaborating with Tencent and TME, including the opportunity to expand our business into China. This deal will allow Instrumental to accelerate our commitment to becoming an \u201cartist first\u201d business, delivering insights and partnerships directly to the great talent discovered by our app.<\/p>\n

“That includes expanding our label and publishing services but also launching new products that meet the needs of high growth artists at the earliest stages of building a career in the music business including merchandise, digital live events and brand partnerships.\u201d<\/p>\n

\u201cInstrumental\u2019s unique blend of data science, AI and innovative business models for a new, streaming first music industry fits perfectly with Tencent\u2019s global investment strategy.”<\/p>\n

Ling Ge, Tencent Holdings<\/span><\/p><\/blockquote>\n

Tencent Holdings, Chief European Representative, Ling Ge, added: \u201cInstrumental\u2019s unique blend of data science, AI and innovative business models for a new, streaming first music industry fits perfectly with Tencent\u2019s global investment strategy.<\/p>\n

“We look forward to working with Conrad and the team to build the business both in China and internationally and establish it further as a leader in its field.\u201d<\/p>\n

“The cooperation with Instrumental will certainly bring greater impetus to the innovation of TME in AI technology application, as a win-win combination of better service for our users, good promotion for the growing artists, and the sound development of the entire online music industry.\u201d<\/p>\n

Dennis Hau, Tencent Music Entertainment Group<\/span><\/p><\/blockquote>\n

Tencent Music Entertainment Group, Group Vice President, Dennis Hau, added: \u201cAs the leading online music entertainment platform in China, TME has always been committed to capitalizing on cutting-edge and emerging technologies to transform its services, amplify social functionalities to encourage user engagement.<\/p>\n

“With years of advanced research and application of AI technologies, we have improved the efficiency in selecting, discovering and distributing quality content and promoting the growth of artists, which allowed our hundreds of millions of users to enjoy more diversified content with high quality.<\/p>\n

“The cooperation with Instrumental will certainly bring greater impetus to the innovation of TME in AI technology application, as a win-win combination of better service for our users, good promotion for the growing artists, and the sound development of the entire online music industry.\u201d<\/p>\n

“Tencent\u2019s and TME\u2019s investment recognises the opportunity we have to change how emerging artists are discovered and progress their careers.”<\/p>\n

Charles Mindenhall, Blenheim Chalcot<\/span><\/p><\/blockquote>\n

Blenheim Chalcot co-founder and Instrumental chair, Charles Mindenhall, said: \u201cConrad, Abi and the team have done a super job building Instrumental into a very unique player in the fast evolving music industry.<\/p>\n

“Tencent\u2019s and TME\u2019s investment recognises the opportunity we have to change how emerging artists are discovered and progress their careers.<\/p>\n

“Alongside our new investors and Warner Music, we look forward to continuing to support them on this journey.\u201d<\/p>\n

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Elsewhere, Tencent led a consortium that acquired 10% of Universal Music Group in March this year\u00a0for over $3.3bn.<\/a><\/p>\n

Tencent, which owns a 9% stake in Spotify, also\u00a0owns a 1.6% stake in Warner Music Group.<\/a><\/p>\n

London-based Instrumental’s tech spotted huge tracks<\/a>\u00a0by the likes of Lil Nas X, Tones & I and Arizona Zervas months before those artists signed major label deals that helped their careers take off.<\/p>\n

In 2018, the company launched its internal record label<\/a>, Frtyfve, which enables it to invest early in emerging artists spotted by its own technology.<\/p>\n

Instrumental raised $4m two years ago<\/a>\u00a0to fuel its \u201caggressive growth plan\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"

Deal also sees Instrumental enter into exclusive distribution partnership with Tencent Music Entertainment Group in China<\/p>\n","protected":false},"author":15,"featured_media":86531,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7],"tags":[2292,1902,4711],"class_list":["post-93927","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-instrumental","tag-tencent","tag-tme"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/posts\/93927","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/comments?post=93927"}],"version-history":[{"count":0,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/posts\/93927\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/media\/86531"}],"wp:attachment":[{"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/media?parent=93927"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/categories?post=93927"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/tags?post=93927"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}