Tencent Music Entertainment, China’s largest digital music conglomerate, experienced a nearly 7% increase in revenue during the July-September quarter. This growth was primarily driven by the success of its streaming services, which offset the decline in the group’s social entertainment activities.
Financial Performance
In the third quarter of the financial year, Tencent Music Entertainment saw a 35% rise in net profits, reaching RMB1.71 billion ($244 million) on revenue of RMB7.02 billion ($1 billion). Over the nine months, revenues remained stable at RMB20.9 billion ($2.98 billion), with net profits increasing by 32% in local currency terms to RMB5.03 billion ($717 million).
Streaming Music Services
Tencent Music’s streaming music services saw positive growth, with a two million increase in paying subscribers, totaling 119 million. The average revenue per subscriber also rose to RMB10.8, resulting in a 20% year-on-year growth in music subscription revenues to RMB3.84 million ($547 million).
Social Entertainment
In contrast, social entertainment experienced a slight uptick in subscriber numbers, reaching 7.8 million. However, per user revenue decreased by 25%. Social entertainment services like WeSing and Kuwo Music faced challenges due to regulatory changes in China, leading to the removal of some live music services.
Executive Statements
Executive chairman Cussion Pang highlighted the company’s commitment to quality growth and the synergy between its platform and content ecosystem. CEO Ross Liang emphasized the importance of balanced growth and the acceptance of premium memberships by users.
Operational Highlights
Tencent Music Entertainment forged new partnerships with record labels, expanded its K-pop content offerings, and introduced innovative product features. Collaborations with popular IPs further enhanced user engagement on the platform.
Conclusion
In conclusion, Tencent Music Entertainment’s strong financial performance, strategic partnerships, and product innovations position it for continued growth in the digital music industry. The company’s focus on quality growth and user engagement bodes well for its long-term success.
FAQs
Q: What were the key factors driving Tencent Music Entertainment’s revenue growth in the third quarter?
A: The growth in revenue was primarily driven by the success of the company’s streaming music services, which saw an increase in paying subscribers and average revenue per user.
Q: How did social entertainment services perform during the quarter?
A: Social entertainment services experienced a slight increase in subscriber numbers but a decrease in per user revenue, partly due to regulatory changes in China affecting live music services.
Q: What were some of the operational highlights for Tencent Music Entertainment during the quarter?
A: The company formed new partnerships with record labels, expanded its K-pop content offerings, introduced new product features, and collaborated with popular IPs to drive user engagement.
Credit: variety.com
