Tencent Music Continues Solid Growth, Profit
China-based music streaming giant Tencent Music turned a profit in the last quarter of 2019 and posted strong results for the full fiscal year.
For their final fiscal quarter in 2019, Tencent reported that total revenue increased by 34.0% year-over-year to RMB25.43 billion (US$3.65 billion).
Operating profit increased by 126.7% from the same quarter in 2018 to RMB4.62 billion (US$664 million), while net profit was up by 117.2% year-over-year to RMB3.98 billion (US$572 million).
“2019 marked a year of healthy growth across our businesses. We made a significant contribution to upholding music copyright protection, supporting original content creation and designing innovative monetization models to unlock the intrinsic value of music. We are proud to say that our all-rounded services to support original music content have made our indie musician program a powerful platform for talents to demonstrate skillsets and stage their singing careers. Our strategic transition to pay-for-streaming service has started to pay off, contributing to paying ratio expansion for online music services to 6.2% in the fourth quarter of 2019, up significantly from 4.2% for the same quarter of 2018,” said Tony Yip, Chief Strategy Officer of Tencent Music.
During that period, paying subscribers for Tencent streaming services grew by an impressive 47.8% to 39.9 million, with 4.5 million new users signing up in the fourth quarter.
Tencent also touted several accomplishments during the fourth quarter, including developing strategic partnerships with multiple domestic and international music labels as well as expanding its content libraries to include more short videos, long-form audio, music-centric variety shows as well as original soundtracks (“OST”) for films, games, drama series and literature.
“We concluded 2019 with many accomplishments, one of which was our significantly improved promotional capabilities, which not only leverage TME’s own platform but also through cooperation with external channels. In addition, our social entertainment ecosystem has become increasingly dynamic. Our annual flagship social entertainment galas, providing hosts, KOLs and music lovers with interactive experiences, attracted record high participation of performers and users, and contributed to solid paying user growth and average spend expansion in the fourth quarter of 2019. Our upgraded applications of QQ Music and Kugou Music, coupled with enhanced data analytics capability, have continuously improved user engagement, contributing to a sequential double digit increase in daily streams driven by recommendation in the fourth quarter of 2019. For 2020, we look forward to launching live streaming service on our QQ Music application, and tapping into China’s massive but under-penetrated long-form audio market starting from our strategic cooperation with China Literature, a leading online literature platform in China. These new initiatives, supported by our industry leadership and operational track record, will enable us to build a stronger foundation and take our company to the next level of growth,” Yip added.
At the same time, Tencent provided details about their full fiscal year results, showing equally impressive growth.
For 2019, Tencent recorded revenue of RMB25.43 billion (US$3.65 billion), up 34% from 2018. Net profit during the period increased toRMB3.98 billion (US$572 million) up substantially from RMB1.83 billion in 2018.