Tencent Music Reports Better-Than-Expected Revenue Driven by Robust User Growth
Tencent Music Entertainment (TME), China’s largest online music entertainment platform, announced their Q2 2020 financial results on August 10, 2020. The report reveals that TME is benefitting from strong demand for its music streaming services, which pushed revenue above expectations despite the COVID-19 pandemic.
The Numbers
TME’s revenue increased to $1.1 billion, beating analysts’ expectations of $1.08 billion. The company’s revenue for the quarter was up by 17.5% YoY. Online music subscription revenue grew 42.6% YoY to $254 million, while the revenue from social entertainment services increased by 3.5% YoY to $849 million. The music streaming platform’s monthly active users grew to 657 million, a 5.9% increase YoY.
Driving Factors Behind TME’s Revenue Increase
TME has been expanding its portfolio and acquiring licenses to provide users with more original content, including music, live performances, and podcasts. TME also benefited from the intense rivalry between ByteDance’s TikTok and other online video and music platforms. ByteDance invested heavily in promoting its competitor Resso, and TME was able to benefit from the industry-wide marketing campaign. Additionally, with social distancing in effect due to COVID-19, people are spending more time online, which has led to increased music streaming. TME’s diversified range of services, including karaoke, live streaming, and music streaming, have helped it capitalize on a market opportunity.
The Future
TME expects the trend of more people spending time online and increased music streaming to continue, which can further increase TME’s revenue. TME CEO, Cussion Pang, said, “We believe our broad range of socially interactive experiences and content will continue to resonate with our users and drive our growth over the long-term.”
Conclusion
TME’s Q2 2020 financial results are impressive. The company’s revenue has beaten expectations despite the COVID-19 pandemic, and its monthly active users continue to grow. TME’s diversified services have given it a competitive edge, and with the current trend of more people spending time online, the company predicts continued revenue growth.
#TencentMusic #Q2results #China #MusicStreaming #UserGrowth #BUSINESS