Tencent Music Reports Surge in Q2 2023 Revenue as More Chinese Users Pay

On Monday, August 15, Tencent Music Entertainment Group, China’s leading online music and entertainment platform, reported a surge in revenue for Q2 2023. The company’s total revenue, which stood at RMB7.29 billion (US$1.01 billion), surged by 5.5% from a year ago.

Tencent Music in Q2 2023

This growth specifically comes from the growth in the paying users on its Spotify-like music-streaming platform as well as the recovery in the advertising market. Following a period of cautious expenditure, businesses are beginning to witness a recovery, driven by indications of decreasing inflation and an improving consumer outlook for the remainder of the year.

Revenues from the music subscription represented a 37.2% year-over-year growth. The count of active paying users rose to 99.4 million, marking a 20.2% increase compared to the previous year and a growth of 5.0 million users from the previous quarter. Mr. Cussion Pang, Executive Chairman of Tencent Music Entertainment noted:

“We are pleased to report a solid second quarter, supported by the continued strong growth of our online music services. As we continue driving the healthy development of China’s online music industry, we have seen users become increasingly accustomed and willing to pay for copyrighted music, whether for songs they want to listen to or for premium listening features they enjoy. This trend is evidenced by the all-time high paying ratio and ARPPU recorded by our online music services in the reported quarter. Such achievements led to revenues from online music services exceeding that of social entertainment services for the first time in our Company’s history. This marks a significant step along TME’s growth trajectory.”

TME Plans Further Expansion

The company has been increasing its original content offerings to draw in more users and counter competition from platforms like Cloud Music owned by NetEase and ByteDance’s Douyin, a short-video sharing platform.

Mr. Cussion Pang, the Executive Chairman of TME, has stated that the company has initiated several service enhancement and risk control measures since the latter part of the second quarter of 2023. These measures aim at fostering a more music-centric live-streaming atmosphere.

While these actions are expected to exert pressure on revenues from social entertainment services in the latter half of 2023, potentially impacting total revenues for the year, Mr. Pang believes that these measures will ultimately lead to an optimized user experience and contribute to the company’s long-term business development.

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