×
You will be redirected back to your article in seconds

Paying Users Push Tencent Music to Greater Q3 Growth

Tencent Music Entertainment (TME), one of China’s biggest online music entertainment platforms, saw better than expected revenue growth in its third quarter thanks to a rise in paywalls and paying users.

Announced on Monday, revenue beat analyst estimates by growing 31% to $910 million (RMB6.51 billion) for the quarter ending Sept. 30, up from RMB4.97 billion in the same period last year. The rise was driven by better revenues from music subscriptions, up 48% year-on-year to $132 million (RMB942 million), thanks to a rise in paid users and better retention rates of paying users.

TME’s total user base is three times that of Spotify’s, but it has fewer paying users. Currently, it tallies 35.4 million of them, an increase of 42% year-on-year. Spotify has more than 100 million paid users, and so its $2.2 billion Q3 revenue was far greater than TME’s. (The two announced a strategic share swap back in 2017.)

TME owns streaming platform QQ Music and social entertainment apps such as the karaoke platform WeSing and concert livestreaming apps Kugou and Kuwo, among others. While QQ Music has more users, the latter category brings in more business. The firm is itself controlled by tech conglomerate Tencent Holdings, which also owns the ubiquitous WeChat social media app and the world’s largest gaming company, among a host of other divisions.

Despite a solid quarterly performance, monthly average revenue per paying user on the company’s social entertainment services – a key metric for the core business – grew at the slowest rate since the New York-listed firm went public in December, rising 7.4% to $18.10 (RMB127.3). Tencent Music’s social entertainment sector now has 12.2 million paying users, up 23.2% from last year.

“We recognize that [revenue] may be slightly below where we previously thought it would be,” TME chief strategy officer Tony Yip was quoted as saying on a conference call, attributing the lag to growing competition from short video platforms like Douyin – China’s version of TikTok – and Kuaishou, which is also backed by Tencent.

TME CEO Cussion Pang told investors that the company planned to “continually add in more content behind the [streaming] paywall,” a process it began at the start of the year, when none of its content was behind a paywall. “Right now, we’re just in the high single digits; we will continue to add on top of this…in a gradual manner,” he said of plans to grow the percentage of paywalled content, according to Music Business Worldwide.

Tencent Holdings remains in talks to acquire a minority stake in Universal Music Group.

More Music

  • Taylor Swift

    Taylor Swift Adds Glastonbury Headlining Slot to 2020 European Tour

    When Taylor Swift announced that a mere four stadium shows in two cities in California and Massachusetts would be the only official U.S. dates on her “Lover” tour next summer, the emphasis at the time was on the American. Additional dates have been scheduled for overseas festivals and stadiums, and speculation that she would be [...]

  • Taylor Swift performs on her 30th

    Taylor Swift Celebrates Her 30th Birthday Onstage at New York Jingle Ball

    Taylor Swift celebrated her 30th birthday with over 20,000 of her closest friends onstage at Madison Square Garden for iHeartRadio’s annual Jingle Ball, hosted by New York City’s Z100. Swift took a moment to thank fans for coming to her party. “I had a choice,” she said. “Where would I want to spend my 30th [...]

  • Harry Styles Stevie Nicks

    Harry Styles Brings Out Stevie Nicks, Reworks One Direction Classic at the Forum (Watch)

    Harry Styles strutted, sashayed and transfixed the crowd at the Forum on Friday night (Dec. 13) for his combination record release party and one-night-only superfan affair. “Fine Line,” as his album is titled and the engagement touted on the outside of the venue, featured the live debuts of nine new songs including standout stunners “Golden,” [...]

  • Pete York and Rain Phoenix

    Rain Phoenix Joins Pete Yorn for 'Relator,' Originally Sung With Scarlett Johansson (Watch)

    Ten years before “Señorita,” another famous twosome recorded a romantic duet together: Pete Yorn and Scarlett Johansson, who joined forces on “Relator.” It was the first single from an entire album of collaborations, 2009’s “Break Up,” which was inspired by the songs of Serge Gainsbourg and Brigitte Bardot, but fans hardly ever got to hear [...]

  • US Capitol

    The Sneaky Long Game of ALI’s Restatement of Copyright (Guest Column)

    Last week, Senator Thom Tillis and four other members of Congress sent a letter to an organization you may never have heard of, the American Law Institute (ALI).  The letter questions the ALI’s ongoing project to publish a competing version of the Copyright Act – or, as the ALI calls it, a “Restatement” of copyright [...]

  • Tom Petty’s Daughters, Widow Settle Legal

    Tom Petty’s Daughters, Widow Settle Legal Battle Over Estate

    Tom Petty’s widow and daughters from a previous marriage have settled their bitter legal battle, according to a report in Rolling Stone. Earlier this year, Adria Petty and Annakim Violette, the late singer’s daughters with his former wife Jane, sued his second wife, Dana York, for $5 million, alleging that she had deprived them of [...]

More From Our Brands

Access exclusive content