China’s dominant music streaming service Tencent Music has reported resilience in the face of dual headwinds, with revenue declines modestly narrowing last quarter thanks to a spike in paid users.
The results, announced yesterday, provide evidence that Tencent Music’s strategic pivot toward subscriptions is gaining momentum. Revenue fell a mere 1.7% to 7.16 billion yuan ($999 million) for the three months ended June 30th – a smaller decrease than analysts predicted.
This marks the fourth consecutive quarter of revenue retreats as Beijing’s ongoing crackdown on livestreaming continues disrupting the sector. But the company’s online music segment saw a striking 27.7% increase in sales, largely offsetting losses elsewhere.
A key driver was a 17.7% surge in paying subscribers for streaming music, which now totals 117 million. Aggressive promotions with partners across telecoms, e-commerce, and video apps fueled new customer growth.
In contrast, revenue for Tencent Music’s social entertainment division plunged 42.8% year-over-year as regulatory restrictions squeezed the once-booming live broadcasting industry. Some streamers had faced accusations of rigging popular prizes with viewer collusion.
While acknowledging “challenges” will persist from regulation and competition, Executive Chairman Cussion Pang expressed confidence that the subscription-based music business is positioning Tencent Music for long-term growth.
