Tencent Music hums positive tune as library boosts subscriptions, revenue

Company inks new deal with home of The Beatles and Taylor Swift

China's Tencent Music Entertainment Group beat Wall Street estimates for quarterly revenue on Monday, as a wider content library led to a surge in paid subscribers for the company's music streaming service.

Continue Reading Below

WARNER MUSIC TO LEAD A HOT IPO SEASON

The company has signed multiple partnerships with international and domestic music labels to expand its premium user base.

On Monday, it also extended its multi-year licensing agreement with music company Universal Music Group (UMG), home to Taylor Swift and The Beatles, while also announcing a new joint venture music label.

TAYLOR SWIFT SIGNS WITH UNIVERSAL MUSIC PUBLISHING GROUP

In March, a consortium including Tencent Music completed a 10% stake purchase in UMG. The deal allowed the China-based music streaming company's users access to more U.S. artistes, and UMG to tap into the Asian market, including top-selling "K-Pop" Korean pop stars.

TickerSecurityLastChangeChange %
TMETENCENT MUSIC ENTERTAINMENT GROUP14.77-0.21-1.39%
SPOTSPOTIFY TECHNOLOGY240.68+1.26+0.53%

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 ended June 30.

In comparison, investor and peer Spotify Technology SA reported 138 million paid users in the quarter.

CLICK HERE TO READ MORE ON FOX BUSINESS

Unlike Spotify, Tencent Music generates only a part of its revenue from music subscription packages and relies heavily on services popular in China such as online karaoke and live streaming.

Revenue from Tencent Music's social entertainment services, the largest unit that house karaoke platforms, rose 8.6% to 4.71 billion yuan.

Net income attributable to shareholders rose 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, beating estimates of 6.85 billion yuan, according to IBES data from Refinitiv.

CLICK HERE TO READ MORE ON FOX BUSINESS