Chinese music streaming platform NetEase Cloud Music has sued South Korea’s SM Entertainment, alleging abuse of market dominance.
Local digital news outlet Jiemian reported on Thursday (July 31), citing court documents, that Hangzhou Ledu Technology and Hangzhou NetEase Cloud Music Technology are pursuing legal action against SM Entertainment and its Shanghai subsidiary, Kasmeng (Shanghai) Culture Communication.
The Hangzhou Intermediate People’s Court in Zhejiang Province has scheduled hearings for Wednesday (August 6), according to Jiemian.
The development comes over six months after NetEase Cloud Music secured a temporary agreement with SM to keep the latter’s catalog available beyond a January 31 contract deadline.
SM Entertainment is the company behind prominent K-pop acts like EXO, Girls’ Generation, Red Velvet, aespa, NCT, and Riize.
Prior to the January deal, there were concerns that Chinese listeners would lose access to a significant portion of K-pop content after the Chinese company warned users that SM Entertainment‘s entire music catalog might be removed from the platform due to unsuccessful licensing renewal negotiations.
The companies last renewed a multi-year partnership in 2022.
Cloud Music at the time said: “NetEase Cloud Music had issued a somber notice to fans warning that SM Entertainment’s unilateral decision to not renew the copyright could result in the removal of all its songs from the streaming service.”
The company added that the “overwhelming support and earnest pleas from fans” played a role in bringing the two companies to the negotiating table.
The two companies’ initial partnership began in 2018 when Cloud Music first secured the rights to distribute SM Entertainment’s music catalog in China.
SM Entertainment represents more than 400 artists, including its own trained musicians. Its roster includes the likes of aespa, EXO, SUPER JUNIOR, NCT 127 and more.
Meanwhile, NetEase Cloud Music also has a separate deal with Kakao Entertainment, signed in May 2024.
In 2023, Kakao Entertainment became the largest shareholder in SM Entertainment following a months-long corporate battle against SM rival HYBE to take control of the K-pop company, which also owns several major K-pop agencies including Starship Entertainment, EDAM Entertainment, and Antenna
Kakao Entertainment, together with its parent Kakao Corp., holds a 40.28% stake in SM.
Complicating matters further, NetEase Music Cloud rival Tencent Music Entertainment acquired a 9.38% stake in SM Entertainment in May 2025.
Tencent Music bought 2.21 million shares in SM Entertainment for 243.35 billion South Korean won (approx. USD $175.7 million).
NetEase Cloud Music is China’s second-largest music streaming provider after Tencent Music.
Earlier this year, the firm reported a 23.1% year-on-year jump in annual revenue from online music services for 2024.
In its earnings report for calendar 2024, NCM reported revenue of RMB 5.35 billion from music services, equating to USD $743.5 million.
Revenue from paid subscriptions jumped 22.2% YoY to RMB 4.46 billion ($619.8 million), which the company said was “fuelled by an increase in our subscriber base, though slightly offset by a dilution in monthly ARPPU (average revenue per paying user).”
NCM didn’t disclose its total number of paying subscribers or monthly active users.
A year earlier, NetEase reported 44.12 million paying subscribers as of the end of 2023.Music Business Worldwide
