Amid Chinese Government Pressure, Tencent Music Subscribers Grow Significantly

JAKARTA – China's Tencent Music Entertainment Group beat analysts' forecasts for their third-quarter profit on Monday, November 8, as efforts to ramp up content attracted more paying users to music streaming platforms like Spotify.

Users paying for online music jumped 37.7% to 71.2 million from a year earlier, an increase of 5 million from the previous quarter.

These excellent results come amid a regulatory crackdown in China in sectors from technology to education and property. The parent company, Tencent Holdings, said in August it had terminated all exclusive music copyright agreements after regulators barred it from the deal.

Excluding items, Tencent Music earned 0.61 yuan per American Depository Share (ADS), beating estimates of 0.49 yuan per ADS, according to Refinitiv IBES.

"While China's online music industry adapts to changing regulations and faces competition for time spent from short video services, we will continue to differentiate our online music and social entertainment services and execute our dual-engine content and platform strategy," Executive Chairman Cussion Pang said. in a statement quoted by Reuters.

Tencent Music's social entertainment business, which includes a karaoke platform where users can live stream concerts, is its main source of revenue.

Total revenue rose 3% to 7.805 billion yuan (IDR 17.3 trillion) in the third quarter, while analysts expected 7.845 billion yuan.

Profit attributable to the company's shareholders fell to 740 million yuan, from 1.13 billion yuan a year earlier.