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China’s Tencent Music Entertainment Group slashed Wall Street estimates for quarterly revenue on Monday as a broader content library led to an increase in paid subscribers to the company’s music streaming service.
WARNER MUSIC TO PUT ONE HOT SEASON
The company has signed multiple collaborations with international and domestic music labels to expand its premium user base.
On Monday, it also extended its multi-year license agreement with music company Universal Music Group (UMG), home of Taylor Swift and The Beatles, while also announcing a new joint venture music label.
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In March, a consortium including Tencent Music completed a 10% acquisition in UMG. The deal allowed users of the music streaming company’s access to more American artists, and UMG to tap into the Asian market, including top-selling “K-Pop” Korean pop stars.
| Ticker | Security | Last | Change | Change% |
|---|---|---|---|---|
| TME | TENCENT MUSIC ENTERTAINMENT GROUP | 15.69 | -0.33 | -2.06% |
| PLAK | SPOTIFYTECHNOLOGY | 248.99 | -3.13 | -1.24% |
Tencent Music, controlled by Chinese tech giant Tencent Holdings Ltd, said paid users of its online music service rose 52% to 47.1 million in the second quarter ending June 30.
In comparison, investor and peer Spotify Technology SA reported 138 million paid users in the quarter.
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Unlike Spotify, Tencent Music generates only a portion of its revenue from music subscription packages and demands heavily on services popular in China, such as online karaoke and live streaming.
Revenue from social entertainment services of Tencent Music, the largest entity containing karaoke platforms, rose 8.6% to 4.71 billion yuan.
Net income attributable to shareholders increased 1.3% to 939 million yuan ($ 134.89 million) from 927 million yuan a year earlier.
Revenue jumped 17.5% to 6.93 billion yuan, hitting an estimate of 6.85 billion yuan, according to IBES data from Refinitiv.
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