Tencent Music Entertainment (TME) has released its unaudited second-quarter financial figures for 2021.
QQ Music, Kugou, KuWo, and WeSing are all part of the firm, which also has a strategic collaboration with SM Entertainment for music distribution in China.
Tencent Q2 Earnings report
The firm said in its financial report that its total online music paying subscribers increased by 5.3 million, the biggest quarterly net gain since 2016. This represents a 40.6 percent growth year over year, bringing the total number of online music paying consumers to 66.2 million, a new high, thanks to investments in long-form audio and a renewed music catalog bolstered by license agreements with Universal Music Group, Sony Music, and other companies.
TME also announced a 36.3 percent year-over-year rise in music subscription revenue in the second quarter, with revenue of USD 277 million.
Tencent Music’s social entertainment services division, which includes karaoke sites where users can live stream concerts, grew 7.4% to 5.06 billion yuan in the third quarter, accounting for the majority of the company’s income.
Total sales increased by 15.5 percent to 8.01 billion yuan (USD 1.24 billion) but fell short of the 8.13 billion yuan forecast by Refinitiv IBES. On an adjusted basis, the business earned 0.66 yuan per American depository share, above expectations of 0.62 yuan.
“In the second quarter, we generated consistent growth overall,” TME Executive Chairman Cussion Pang stated in a news statement. Solid subscription and advertising revenue growth aided our strong momentum in online music monetization, while social entertainment services progressed at a decent clip.”
Elegant Summer Live, cooperation between QQ Music and Weixin Video Account, is an example of how the audio entertainment firm would collaborate with Weixin Video Account to promote performers such as online concerts. They’ll also use Weixin’s social network to increase engagement by utilizing AI technology to deliver great translations of English songs into Chinese.
Tencent Music stock
Tencent Music’s stock gained 3.1 percent in extended trade after the company reported profits, reversing a 9 percent drop earlier in the day. Due to Beijing’s crackdown on internet companies and a judgement that banned the company’s parent, Tencent Holdings Ltd, from exclusive music copyright deals, the stock has lost half its market value this year.
What’s next for Tencent Music?
TME has revealed intentions to increase its content in the future, in addition to the financial report.
TME will continue to strengthen its relationships with record labels, collaborate with artists and industry partners to create more original content, and stage TME Live events using a hybrid approach.
Tencent Music CEO Liang Zhu told investors that the company believes Chinese regulators are ultimately interested in the healthy growth of the music business and that the company fully supports the government’s regulations. The business anticipates the ruling on copyright agreements to have some influence on its operations, according to its report, but Liang believes it will not have a significant impact on its online subscriptions.
Tencent Music derives the majority of its revenue from social entertainment such as online Karaoke and live streaming, according to Frank Zhao, a Beijing-based independent music industry researcher.