Tencent Music's Streaming Boom Despite Social Slump

Tencent Music Entertainment, the biggest digital music company in China, saw its revenue grow by nearly 7% in the third quarter of 2023. This growth was largely thanks to its streaming services, which managed to increase the number of paying subscribers and the average revenue per subscriber. The company now has 119 million paying subscribers, up by two million from the previous quarter. This helped music subscription revenues grow by 20% year on year, reaching RMB3. 84 billion ($547 million). Meanwhile, the company's social entertainment activities, which include karaoke app WeSing and live concert platform Kuwo Music, saw a slight increase in subscriber numbers but a significant drop in per user revenue. This was due to changes in China's regulations that forced the company to remove some of its live music services. Net profits for the third quarter climbed by 35% to RMB1. 71 billion ($244 million) on revenue of RMB7. 02 billion ($1 billion). Over the nine months, revenues were steady at RMB20. 9 billion ($2. 98 billion) and net profits were RMB5. 03 billion ($717 million), representing a 32% gain in local currency terms. The company's executive chairman, Cussion Pang, highlighted the growth in music subscribers and diversified music services as key drivers of overall growth and profitability. CEO Ross Liang added that the company's approach to growth, which includes offering enriched user privileges, has been well-received and is driving user loyalty. In terms of operational highlights, Tencent Music updated partnerships with leading record labels and formed a strategic alliance to boost its K-pop content offerings. It also introduced new product features and collaborated with popular IPs to drive user engagement.