Tencent Music Entertainment (TME), managed by Chinese tech giant Tencent, has reported total revenues of US$891 million for the first quarter of 2020, representing a 10% growth year over year.
According to a statement, of that total, US$289 million came from its online music services, while its social entertainment services segment contributed US$603 million.
Photo credit: Tencent Music Entertainment
TME said that during the quarter, it saw its online music-paying user base achieve a 50.4% year over year growth to 42.7 million, or about 6% of its 657 million mobile monthly active users. Its music subscription service also raked in US$170 million in Q1 2020, a 70% growth from last year, with average revenue per paying user (ARPPU) increasing by 13.3% for the period.
However, the company’s revenue from social entertainment and other related services only saw a 3.3% growth within the same period. While the paying user base in the segment expanded by 18.5%, the ARPPU decreased by 12.9% year over year due to the impact of the Covid-19 pandemic, as well as general adjustments in its livestreaming service.
“While acknowledging [the pandemic’s] impact on our social entertainment services, we have started to see a moderate recovery recently,” said Cussion Pang, CEO of TME.
Tony Yip, chief strategy officer at TME, said that growth will start to pick up in the second quarter. Analysts expect the company will report an 8.5% increase in its second-quarter revenue, according to Reuters.
TME, dubbed as China’s Spotify, operates QQ Music, Kugou Music, Kuwo Music, and WeSing. Its services cover online music, online karaoke, and music-centric livestreaming.
During the pandemic, it launched TME Live, a livestreaming model that integrates offline concerts with an online livestreaming experience. It also incubated a new mobile app called Kugou Changchang to offer online music streaming and singing services.
Yip said the company has also made “significant progress” in expanding its long-form audio content offering. TME has made thousands of audiobooks available in its library through strategic partnerships with China Literature and other online literature platforms. It has also started cooperating with drama series and local comic IPs for audio adaptation. In addition, the company has launched a new long-form audio app, Kuwo Changting.
Leading players in China’s crowded audio content space include Ximalaya and Nasdaq-listed Lizhi.
Editing by Charmaine de Lazo
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