Tencent navigates Q1 2020 with limited impact from C-19

By Emmanuel Legrand

Tencent Music Entertainment (TME) has reported a significant growth in paid subscribers to the Chinese music streaming services/social network, with online paying users reaching 42.7 million for the first quarter ending March 30, a 50.4% rise year-on-year.

  Total revenues for the quarter were up 10% y-o-y, to $891 million, of which online music subscription revenues accounted for $170m, up 70% compared to the same quarter on 2019. Revenues from social entertainment services were up 3.3% to $603m. 

  "We achieved healthy first quarter performance primarily fueled by robust growth from online music subscription revenues,” explained Tencent Music CEO Cussion Pang.

  TME, which operates music apps QQ Music, Kugou Music, Kuwo Music and WeSing, saw Average Revenue Per Paying User (ARPPU) rising 13% in the online music segment, but dropping 12.9% in social entertainment, reflecting the impact of the coronavirus crisis and “adjustments to certain features in livestreaming.”

Optimistic about the future

  “While acknowledging the impact on our social entertainment services from the Covid-19 pandemic, we have started to see a moderate recovery recently," said Pang. "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. Leveraging our massive and in-depth user insights, we successfully discovered and promoted many hit songs to gain nationwide popularity, which reinforces our distinctive value proposition as a leading indie musician platform in China."

  CFO Shirley Hu said the quarterly figures reflected "the successes of paying user retention and content paywall strategy." She added, “Looking forward, we continue to be optimistic about the future of the broader music industry and are confident in the overall ecosystem and product pipelines that we are building. We'll continue to focus on enhancing and expanding product and service offerings including long-form audio while maintaining core content investments."