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Tencent Music's quarterly revenue beats on subscriber growth
[BEIJING] China's Tencent Music Entertainment Group reported better-than-expected third-quarter revenue on Monday, as the music streaming company added more paying users.
However, the company recorded the slowest rise in a widely watched growth metric for its biggest business, social entertainment services, in the quarter.
Tencent Music's US-listed shares rose as much as 2 per cent before trading down about 1 per cent in volatile extended trading.
The company's monthly average revenue per paying user from its social entertainment services unit rose 7.4 per cent to 127.3 yuan (S$24.70), the slowest growth since it went public in December last year.
Although its music streaming unit has more users, the company's biggest revenue drivers are its social entertainment services — Karaoke platform 'WeSing' and 'Kugou Live' and 'Kuwo Live' — where users can live stream concerts and shows.
The social entertainment business reported 12.2 million paying users during the quarter, a rise of 23.2 per cent from a year earlier.
Although Tencent Music's user base is nearly three times that of world's largest music streaming service Spotify, a peer and a stakeholder in the company, its paying users are comparatively fewer.
As of the third quarter, Spotify Technology SA has over 100 million paid subscribers, whereas Tencent Music has about 35 million.
Tencent Music, which has a user base of more than 900 million, has been shifting more of its content behind a paywall since May.
The company, controlled by Chinese tech giant Tencent Holdings, said paid users of its online music service jumped about 42 per cent in the reported quarter.
Tencent Music's net income rose to 1.02 billion yuan, in the quarter ended Sept 30 from 964 million yuan, a year earlier.
Revenue rose about 31 per cent to 6.51 billion yuan, above estimates of 6.45 billion yuan, according to IBES data from Refinitiv.
Excluding items, the company earned 0.74 yuan per American depositary share, above estimates of 0.66 yuan.