China’s dominant online music platform Tencent Music Entertainment has renewed and expanded its licensing deal with Warner Music. The group also reported barely changed profits of $637 million (RMB4.16 billion) for 2020.

Calling the agreement an “expanded multi-year strategic licensing agreement,” TME and Warner Music said that Warner content would continue to be available online at QQ Music, Kugou Music and Kuwo Music, as well as its live streaming platforms, the WeSing online karaoke platform, and for certain in-car services. Warner Music and TME have worked together for over ten years.

They will also launch a joint venture record label. “Alongside our increased investment in artist & repertoire and marketing in Greater China, this renewed and expanded partnership means we can help make our artists impossible to ignore in one of the world’s fastest-expanding music markets,” said Simon Robson, president, international, Warner Recorded Music, WMG.

Total revenues at TME during 2020 increased by 15% year-over-year to RMB29.2 billion ($4.47 billion), the company said in a filing.

The data also showed monthly average user numbers dropped, but the number who are paying subscribers increased during the year. Mobile monthly active users for inline music and for social entertainment both dropped by about 4% year on year. Paying users for online music climbed by 44% from 39.9 million to 56 million. For social entertainment, the trend was the reverse, with MAU dropping from 12.6 million to 10.8 million. Average revenue per social entertainment user grew by 26%, however.

“While our online music MAUs slightly declined, core users on our platform are increasingly engaged and we saw a year-over-year increase in average daily user time spent on our platform during the fourth quarter,” said Cussion Pang, TME’s CEO

“We demonstrated resilience and agility during and after the COVID-19 pandemic. We forged ahead with our operations, invested in technologies to customize services and introduced new products to meet the evolving demands of our users,” said Pang.

He also said that profit margins had been sacrificed in order to make investments for the future. These include investments in developing long-form music offerings, attracting more indie bands and making music more linked to social media.

In January 2021, the Tencent-led consortium in which TME has an approximately 10% equity interest increased its total share stake in Universal Music Group from 10% to 20%, following the multi-year extension of TME licensing agreement with UMG in 2020.

TME shares are listed on the New York Stock Exchange. At their Monday closing price of $30.87 the company is valued at $51.8 billion.