Tencent Music expanded its stable of paid subscribers to 42.7 million during 2020’s first quarter — a more than 50 percent year-over-year increase. However, the music streaming service also missed its revenue estimate, and its stock price dropped accordingly.
Tencent Music revealed these and other stats in a newly published Q1 2020 earnings report, which was shared with Digital Music News this morning. Besides experiencing a noteworthy hike in total paid users, the Tencent subsidiary recorded a 13.3 percent boost to its average revenue per paid subscriber, compared to 2019’s first three months.
Similarly, Q1 2020’s total revenue exceeded $890 million, a 10 percent hike from Q1 2019, whereas online music subscription earnings themselves jumped 70 percent year over year.
However, the company’s income translated into just 7 cents per share, below Wall Street’s expected 8 cents per share. Tencent Music’s failing to meet the earnings forecast is attributable, at least in part, to increased operating expenses, which grew 11 percent year over year, to $164 million. And predictably, the coronavirus (COVID-19) crisis also factored into the streaming platform’s financial performance.
Tencent Music’s stock, traded under the symbol TME, fell following the report’s publishing, but subsequently rebounded. At the time of this piece’s writing, the company’s per-share price was hovering around $11.60 – up substantially from the $9.52 it touched as the novel coronavirus first rocked the market.
Addressing his company’s Q1 2020 earnings analysis, CEO Cussion Pang said: “By ensuring our model offers a win-win situation for both the artists and ourselves, we were able to attract even more talented musicians and develop more original content.”
Tencent Music Chief Strategy Officer Tony Yip, for his part, stated: “We are pleased to see strength in both our online music and social entertainment MAUs, especially during the COVID-19 outbreak which impacted businesses in many different ways.”