Shares of youth-oriented video-sharing specialist Bilibili (NASDAQ:BILI) rose as much as 17.6% in Thursday morning's trading, lifted by a new partnership with Tencent Music Entertainment's (NYSE:TME) QQ Music service. Tencent Music's stock also surged as much as 7.2% higher on the news. By noon EST, Bilibili's shares had settled down to a gain of 13.4%, while Tencent Music retreated to a 5.9% increase.
Under the new partnership, Bilibili and QQ Music will cross-promote musicians and music content. The two companies will also work together to create new music content such as live online events, remixes of popular songs, and co-production of new albums.
"Bilibili is home to a large number of talented music creators and enthusiasts who are keen on secondary creation," Bilibili COO Li Ni said in a prepared statement. "As a leading domestic digital music platform, QQ Music has accumulated abundant experience in music copyright management, record distribution, as well as the support and promotion of musicians."
This agreement involves two of the most popular online media services in China. Tencent Music boasts 661 million monthly active users across its three music services, while Bilibili sports 128 million active accounts. It makes sense to see Bilibili rising higher than Tencent Music on this particular agreement, since Bilibili is the smaller partner that arguably has more to win from tapping into QQ Music's massive user base.