China’s Tencent Music beats revenue estimates as paying users surge

FILE PHOTO: WeChat mascots are displayed inside Tencent office at the TIT Creativity Industry Zone in Guangzhou, China May 9, 2017. REUTERS/Bobby Yip/File Photo

China’s Tencent Music Entertainment Group beat Wall Street estimates for fourth-quarter revenue on Monday, as the music streaming service added more paying users, sending its shares up 3% in U.S. extended trading.

Tencent Music, which has been shifting to a paid streaming model, has entered into multiple partnerships with international and domestic music labels in a bid to boost the number of paying users.

In December, a consortium comprising Tencent Music and its parent Tencent Holdings said it would take a 10% stake in Vivendi’s Universal Music Group, the world’s biggest music label which houses Lady Gaga and The Beatles, giving Tencent Music more access to U.S. artistes.

Although Tencent Music‘s user base is nearly three times that of Spotify Technology SA, which is the world’s largest music streaming service, its paying users are comparatively fewer.

Spotify, a stakeholder in Tencent Music, has currently about 124 million paid subscribers, while Tencent Music reported a 47.8% jump to 39.9 million in the fourth quarter.

While Tencent Music has more users in its music streaming unit, the biggest revenue drivers are social entertainment services, including karaoke platforms, where users can live stream concerts and shows.

Monthly average revenue per paying user from Tencent Music‘s social entertainment services rose 9.3% to 138.5 yuan ($19.81) in the fourth quarter. The company reported 12.4 million users for the segment, a rise of 21.6% from a year earlier.

Excluding items, the company earned 0.80 yuan per American depositary share, above analysts’ average estimate of 0.70 yuan per ADS.

Revenue of the company rose 35.1% to 7.29 billion yuan, above estimates of 7.08 billion yuan, according to IBES data from Refinitiv.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.