Karaoke, livestreaming and paid-music subscriber growth boost Tencent Music’s profit

Tencent Music Entertainment reported that its profit for the first quarter of 2019 went up as it earned more from online karaoke and livestreaming services amid a growth in paying subscribers.

The company said that new features on its online karaoke app helped it earn more revenue from its social entertainment business, which is its largest in terms of revenue.

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Monthly average revenue per user for its social entertainment business, which includes online karaoke and livestreaming, rose 28.1% to RMB 127.5 ($US 18.55) in Q1 compared with a year earlier.

Paying users for the company’s online music service rose 27.4% to 28.4 million compared with a year earlier. This increase is a sign that Tencent Music’s investments in premium content are beginning to pay off.

“As our users increasingly consume music content through streaming services, we are riding on this trend to gradually transition into a pay-for-streaming model over the coming years,” said Tencent Music CEO Cussion Pang.

To drive paid-subscriber growth on its platform, the company recently struck content tie-ups with top music labels as well as other partnerships to promote original soundtracks of popular movies and TV shows.

For example, it has inked deals with top a K-pop label and jointly launched a label with Sony Music that’s focused on popular electronic dance music.

Net profit attributable to equity holders of Tencent Music 17.4% to about US$147 million compared to a year earlier. Excluding items, profit rose 14.9% to US$179 million.

Revenues rose 39.4% to about US$855 million during the period compared with a year earlier.

Currency converted from Chinese yuan. Rate US$1 = 6.87 yuan