Dividends and Group led by China’s Tencent buys stake in Universal

When you think about movies and music, one aspect you should consider is the global appeal of the products. In early January, a group including Tencent, Singapore Investment (GIC) and Qatar Investment Authority (QIA) bought 10% of Universal Music Group from Vivendi of France. In 2021, the group has the option to increase their holdings another 10%.

If you do not know Tencent, you may have heard about their main competition Alibaba of China. The deal allows Universal Music Group greater access into the Asian market.

In an article by Sudip Kar-Gupta and Kane Wu of Reuters, the IFPI federation said in April that global recorded music revenues had risen 9.7% in 2019 from last year. For Vivendi, Universal Music Group sales increased nearly 16% to Euro 1.8 Billion.

In November Tencent reported better than expected 3rd quarter revenues. The world’s largest streaming service is Spotify, which Tencent owns a minority share. Spotify has 100 million paid subscriptions, while Tencent Music had 35 million.

Linking to dividend paying stocks, as in the music buisiness there are many interrelationships and a desire to have subscription based service. The greater the people renew, the more money the company generates and the more opportunities it has to continue to make profits to pay dividends.

There are more questions than answers, till the next time – to raising questions.

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