Chinese music-streaming company Tencent Music has published its latest quarterly financial results, revealing that its three online music services (QQ Music, Kugou Music and Kuwo Music) ended March with 42.7 million paying users – up by 50.4% year-on-year. The services had 657 million monthly active users, so that’s a conversion rate of 6.5%, up from 4.3% a year ago.
In its announcement of the results, Tencent Music pointed to strong growth in subscription revenues. “Revenues from music subscriptions were RMB 1.21 billion (US$170 million), a 70.0% growth compared to RMB710 million in the first quarter of 2019, primarily due to the increase in the number of paying users and continuous improvement in monthly ARPPU,” it explained.
That’s the monthly Average Revenue Per Paying User, and it has grown from RMB 8.3 ($1.17) to RMB 9.4 ($1.33) over the last year. Overall, Tencent Music’s online music services generated $289m of revenues in the first quarter of this year, up 27.4% year-on-year. However, they still only accounted for just under a third of Tencent Music’s overall revenues, with ‘social entertainment’ (mostly karaoke and live video) revenues accounting for the other two thirds.
That category’s revenues grew by just 3.3% to $603m, but as ever, there’s a big difference to music in what people are willing to pay. Tencent Music had 256 million monthly active social entertainment users, with 12.8 million of them paying an average of RMB 111.1 ($15.66) a month – nearly 12 times as much as for online music.
The two categories aren’t entirely separate any more. Tencent Music has been experimenting with an app called Kugou Changchang, which adds a karaoke-style ‘online singing experience’ to streaming service Kugou Music. “Although still at its early stage, it has achieved initial traction in its MAU and paying user base,” reported Tencent Music.
Other notes of interest: like Spotify, Tencent Music is expanding into non-music content: thousands of audiobooks as well as “attracting well-known vocal talents to produce more premium UGC content” (i.e. podcasts). It has also continued to sign independent artists: “Both the number of participating musicians and original songs produced doubled year-over-year,” on that front.
The company has been doing more with live music streams through a service called TME Live, which held five concerts in five weeks during the Covid-19 pandemic. It also cited two hits in China, ‘Youth’ and ‘The World Is So Big To Meet You’, as success stories driven by its promotional efforts. The tracks were streamed nearly 2.5bn times on Tencent Music’s services in Q1, and reached nearly 5bn by 10 May.
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