Tencent Music Entertainment Group passed the 50 million threshold for paying users in Q3, according to the latest figures from the China-based streaming giant.
According to the report, online music paying users reached 51.7m in the three months to September 30, a year-on-year increase of 46.7%. It added 4.6m users in the quarter, more than in Q2 (4.4m) or Q1 (2.8m), for the largest net increase since 2016.
Online music subscription revenues also grew 55% year-on-year to RMB 1.46 billion (£162.5m). Total revenues hit RMB 7.58 bn (£846.5m), up 16.4% on the same quarter last year. Net profit hit RMB 1.13 bn (£126.3m). Average revenue per paying user (ARPPU) for online music rose 32% year-on-year.
The results come after Tencent signed new licensing deals with indies via Merlin, Kobalt and Peermusic. The company also said it now featured 20 times more indie musicians offering them exclusive content than a year ago, citing the success of singer Ren Ran’s Bird And Cicada, which racked up over 500m streams in Q3. Long-form audio also grew, while Tencent also hosted over 30 livestreams from the likes of Andy Lau and Jessie J.
"Third quarter results reflect significant progress in our ability to unlock the opportunities that are present in China's dynamic online music industry as we achieved 55% year-over-year growth in online music subscription revenue with increasing paying ratio,” said Cussion Pang, CEO of Tencent Music. “In addition, our overall gross margin expanded at a healthy clip compared with the prior quarter, thanks to the continuous execution of our business strategy and improving operational efficiency. This strong performance reflects our philosophy of quality growth, investing with discipline and the unwavering pursuit to improve user satisfaction."
"Expansion of our music library and diversification of our content offering continued, with more video and long-form audio now available,” he added. “We enriched online music streaming by adding visual, interactive and social attributes to our products, including offering a whole new level of online concert experiences through TME Live. For online social entertainment services, we are pleased to see sustained recovery. Operationally, we continue to focus on optimising our product features, particularly those related to community building and video enrichment, to improve user experiences and enhance our long-term competitiveness."
Earlier this year, Tencent bought a 10% stake in Universal Music. It has the option to buy another 10% before January. It also owns stakes in Warner Music Group and Spotify.
* To make sure you can access vital music biz information wherever you are, sign up to Music Week’s digital edition here.