Tencent Music Entertainment, China’s largest online music corporation, got smaller but more profitable in the first quarter of 2024. That continued a trend seen previously in the company’s 2023 accounts.
Revenues in the January to March quarter weighed in at $937 million (RMB6.77 billion), a 3% decrease compared with the same quarter last year. But profits after tax increased 28% to $212 million (RMB1.53 billion).
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Monthly active users across its free and paid for tiers decreased by 2% to 592 million. But users paying for streaming increased by 20% from 94.4 million to 114 million while those paying for its so-called social entertainment services increased 13% to 8 million. The company managed to increase average revenue per streaming user by 15% to RMB10.6 per person per month. Monthly ARPU for social entertainment fell by more than half to RMB73.4 per person per month.
The combination of higher streaming subscriptions and higher ARPUs, drover revenues from online music services up by 43% year-over-year increase to RMB5.01 billion ($693 million) from RMB3.50 billion in the same period of 2023. The boom was supplemented by growth in revenue from advertising services.
The increase in the number of paying users was primarily due to increased users’ willingness to pay for appealing membership privileges, expanded content, and attractive interactive features. It also optimized promotion campaigns during Chinese New Year to attract more paying users, the company explained.
“online music continued to grow robustly, registering record-high net adds of 6.8 million music subscribers with healthy ARPPU for the first quarter. Our focus on high-quality growth also yielded solid net profit margin expansion. By broadening content and introducing more tailored platform offerings that resonate deeply with users, we continue to strengthen our vibrancy and competitiveness in this dynamic industry,” said Cussion Pang, TME’s executive chairman said in a statement.
The company said that it had expanded its licensed and original content offerings. It renewed a deal with Time Fengjun Entertainment, featuring 30-day head-start privileges on new songs and added Dolby Atmos upgrades for popular idol groups such as TFBOYS. It also renewed a partnership with HIM International Music to bring users more C-pop content.
It produced original soundtracks for trending TV dramas “The Legend of Shen Li” and “In Blossom,” gaining over 150 million streams on its platform. And partnered with strategic artists and indie musicians to create hit songs on social media, such as “River Flow” by Tia Ray and “What I Anticipate Is Not Snow,” by Zhang Miaoge.
Parent company Tencent Corporation is expected to announce its first quarter financials on Tuesday.
