Tencent Music reports a double-digit decline in quarterly revenue amid stiff competition

August 17, 2022 0 Comments

China’s Tencent Music Entertainment Group reported a double-digit decline in quarterly revenue as an economic slowdown partially driven by Beijing’s zero-COVID policy negatively affected the music business.

Shenzhen-headquartered Tencent Music, which consist of QQ Music, Kugou, and Kuwo streaming services as well as the WeSing karaoke app, booked a total revenue of 6.91 billion yuan in the second quarter ended June 30, down 13.8 percent compare to the same quarter of last year.

 Revenue also fell 20% in the social entertainment business – the company’s biggest revenue generator that consists of its karaoke app WeSing and live concert platform Kuwo Music.

Additionally, Tencent Music reported decreases in online music mobile monthly active users (593 million, down 4.8 percent year-over-year), social entertainment mobile MAUs (166 million, down 20.6 percent YoY), social entertainment paid users (7.9 million, down 28.2 percent YoY), and online music’s monthly average revenue per paid user (¥8.5/$1.25, down 5.6 percent YoY but up slightly QoQ).

Tencent, which is best known as the operator of WeChat, has built juggernaut – a media and entertainment empire encompassing music, film and television shows.

The company did it through aggressive investments. In November 2017, Tencent forged an alliance with Spotify, through with its music division, Tencent Music Entertainment Group (TME), acquiring a minority stake in the Swedish music streaming service provider.

Tencent Music Entertainment Group also own QQ Music, Kugou and Kuwo – which a combined 760 million monthly users. However, Tencent Music was at the center of regulatory scrutiny last year, was forced to end its exclusive contracts with big music labels, losing its competitive advantage against rivals such as NetEase’s Cloud Music and Bytedance-owned short-video app Douyin.

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