China’s leading online music firm Tencent Music Entertainment pointed to increased investment as the reason for a no better than flat performance in the first half of the year.

Revenues for the April to June quarter were RMB6.93 billion ($981 million), an increase of 18% year-over-year, and up 14% to RMB13.2 billion for the first six months of the year. Profit in the year to date was down by 4% to RMB1.83 billion ($259 million).

The company said that it continued to swing its business towards paying subscribers. These reached 47.1 million, an increase of 52% compared with June last year. And average revenue per paying user nudged forward by 8%.

“With our content leadership, a well-executed paywall strategy, and enhanced recommendation capabilities, we have significantly improved our online music paying ratio to 7.2%, up from 4.8% in the same quarter of last year,” said Cussion Pang, CEO, in a statement.

Costs rose by 20% in the quarter, “due to increased investments in new product and content offerings, increased revenue sharing fees… and increase in content costs related to digital album sales and variety shows.”

The company’s quarterly statement made just one reference to the impact of the coronavirus. “Social entertainment services performed steadily in the second quarter, registering sequential growth as the COVID-19 situation continued to improve in China,” it said.

The company also confirmed details of a new deal with Universal Music Group that sees TME become a revenue sharing partner, rather than an exclusive licensee. The deal “(incentivizes) both parties to continue to unlock the intrinsic value of music through a mutually beneficial partnership,” it said. “As part of the new contract, we will also form a music label with UMG to further drive the tremendous growth potential of digital music commercialization in China.”