Tencent Music Tops 56 Million Paying Subscribers, Reports 14.3% Quarterly Revenue Jump

Tencent Music IPO Launches at Lowest Expected Price Range
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Tencent Music experienced a 40.4 percent year-over-year boost in paid subscribers during Q4 2020, according to the Shenzhen-headquartered company’s newly released earnings report, with an even 56 million premium accounts across its QQ Music, Kugou Music, and Kuwo Music streaming services.

China’s largest music-streaming company also relayed in its fourth-quarter earnings analysis that revenue grew by 14.3 percent, compared to the same three-month stretch in 2019, to nearly $1.28 billion. A 29 percent year-over-year hike (to $423 million) in income from online music services – including a 41.9 percent uptick in subscription earnings, which came in at $242 million during the quarter, and 100 percent more advertising earnings – was one of the chief contributors to the double-digit bump in overall revenue.

Quarterly income attributable to “social entertainment services and others,” including Tencent Music’s WeSing karaoke app and TME Live livestream platform, crossed $854 million (a YoY jump of 8.2 percent), per the earnings report.

Tencent Music’s net profit, for its part, finished at $183 million, factoring for the three months ending on December 31st, compared to approximately $637 million in net profit (a 4.3 percent improvement from 2019) throughout all of 2020.

And on the monthly active user (MAU) front, TME’s platforms boasted 622 million users as of 2020’s end – a roughly 3.4 percent falloff from Q4 2019. Social-entertainment users declined slightly, to 223 million. But as mentioned, these relatively small dips didn’t stop Tencent Music from recording a massive increase in paid accounts and, in turn, earnings.

Moreover, TME “saw a year-over-year increase in average daily user time spent on our platform,” and the publicly traded company dedicated much of the remainder of the release to highlighting the steps it took in Q4 to broaden its music library and the types of entertainment content that it offers.

Fans Club, “Kugou Music’s new community channel,” experienced a 15 percent gain in “total user time spent,” comparing Q4 and Q3 2020, while “almost half of combined users of Putong Community and Fans Club are in their teens and mid 20’s.” The average daily time spent on the streaming services themselves also increased YoY – a point that Tencent Music attributed in part to its embrace of livestream performances.

In terms of the latter, TME Live has hosted north of 50 concerts to date, with 25 of these shows having taken place in Q4 2020. Building upon the point, the entity enjoyed a 100 percent YoY uptick in “the number of participating indie musicians” across its platforms, and the number of “original songs” uploaded surpassed one million at 2020’s end.

Of particular note here is that streaming exclusives remain prominent in China, and Tencent Music indicated that its “number of exclusive indie musicians increased by 13 times in the fourth quarter.”

Yesterday, Tencent Music revealed that it had inked a massive, multi-year licensing deal with Warner Music, in addition to unveiling plans to establish a jointly owned record label with the Access Industries-owned company. And Tencent, it bears mentioning, owns one-fifth of Universal Music Group, which is slated to arrive on the stock market by this year’s end.