Tencent Music’s revenue beats view as more Chinese users pay for songs

The emblem of China’s Tencent Music Leisure Group is seen subsequent to an earphone on this illustration image taken March 22, 2021. REUTERS/Florence Lo/Illustration

Aug 16 (Reuters) – China’s Tencent Music Leisure Group (TME.N) bettered quarterly income estimates on Monday as a slate of authentic content material helped its music streaming platform appeal to extra paying customers.

The corporate’s U.S. shares rose 5.9% in prolonged buying and selling after it mentioned customers who paid for on-line music jumped by 1 / 4 to 82.7 million. Music subscription income of the platform that operates like Spotify (SPOT.N) rose 18%.

Tencent Music additionally benefited from a push for authentic content material, together with a partnership with father or mother Tencent Holdings (0700.HK) to supply songs from in style sport titles.

Its whole income was 6.91 billion yuan ($1.02 billion) within the second quarter ended June 30, in contrast with the 6.62 billion yuan anticipated by analysts, in keeping with Refinitiv IBES information.

Cheuk Tung Yip, Tencent Music’s chief technique officer, mentioned in a name with analysts on Tuesday that the corporate will proceed to construct up its paywall to drive up income.

“We anticipate extra content material companions shall be added to the paywall within the second half,” he mentioned, including the corporate was additionally dedicated to catering to non-paying customers, who assist generate about 10% of its promoting income.

Tencent Music’s general income, nevertheless, fell 13.8% from the identical quarter of final 12 months, displaying that stiff competitors and an financial slowdown sparked by Beijing’s zero-COVID coverage had been weighing on the music enterprise.

Income additionally fell 20% within the social leisure enterprise – the corporate’s greatest income driver and residential to its karaoke app WeSing and dwell live performance platform Kuwo Music.

Tencent Music has been within the crosshairs of regulators and was pressured final 12 months to finish its unique contracts with massive music labels, eroding its benefit in opposition to rivals comparable to Cloud Music and Bytedance-owned short-video sharing platform Douyin. learn extra

Yip, although, mentioned the corporate is seeing a average restoration from advertisers within the second half in China as COVID-19 outbreaks within the massive cities comparable to Shanghai and Beijing had been introduced underneath management. He listed e-commerce, client staples and auto as industries experiencing rising demand.

Excluding gadgets, Tencent Music earned 0.63 yuan per American depository share (ADS) for the quarter, above estimates of 0.56 yuan per ADS.

($1 = 6.7715 Chinese language yuan renminbi)

Reporting by Tiyashi Datta in Bengaluru; Enhancing by Aditya Soni and Muralikumar Anantharaman

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