Tencent Reports Profit of Nearly $6 Billion as Paid Video Consumption Rises

Chinese social media giant Tencent says that more than 20 million people paid for video content on its websites last year, reflecting a growing acceptance of transactional and subscription models in a country where advertising-supported VoD has been dominant.

The number was included in Tencent’s 2016 financial report, which was published Wednesday after the close of the Hong Kong stock exchange. The group’s massively popular QQ and WeChat (aka Weixin) messaging platforms are driving users in the world’s most populous nation to Tencent’s music, video, games and literature services.

“Our video service ranked first in China in terms of mobile video views. The number of paying users exceeded 20 million, [and] more than tripled [year-on-year]. During the year, we gained initial success in original content with popular titles such as ‘Candle in the Tomb’ and ‘When a Snail Falls in Love,’” the company said.

For 2016, Tencent had revenues of $21.9 billion (RMB151 billion,) an increase of 48%, and net profits of $5.98 billion (RMB41.4 billion.) That was an increase of 42%.

The company credited its social media platforms with helping to boost consumption of its digital content.

“Paying users grew significantly during the year, benefiting from enhanced content, easier payment solutions and the improved copyright protection environment in China,” Tencent Chairman and CEO Pony Ma said in a statement. “For video, we expanded our subscriber base via further investments in premium content, in particular exclusive content where we are deeply involved in production. For music, we drove subscription growth with premium content, achieved initial success in digital albums sales, and boosted virtual gifting consumption on our karaoke platform.”

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