Despite intensifying domestic competition, Tencent Music posted revenue of over $1 billion in the first quarter of 2023, with the Shenzhen-headquartered company reportedly delivering more than 30% year-on-year (YoY) growth in subscription revenue for its streaming services should have.
Tencent Music (NYSE: TME) today announced its first-quarter performance, showing an ongoing decline in social entertainment users on mobile (down 16% year-on-year to 136 million), paid social entertainment users (down down 14.5% yoy to 7.1 million) and online music reported monthly active users (down 6.9% yoy to 592 million) for the three-month period.
While the latter total is nearly 30 million users more than what Tencent Music originally projected for Q4 2022, the company said it began rolling out “unique mobile and certain IoT devices ( Internet of Things)” in the category . Totals for Q1 2023 reflect listeners on TME streaming services QQ, Kugou, and Kuwo, and executives have updated the “comparative figures” to “match current presentation.”
Also worth noting on the straightforward but significant topic is that according to Tencent Music, “duplicate access to different services via the same device is not excluded from the calculation” of monthly active users. Needless to say, this point could lead to a certain degree of overlap among users.
Aside from TME’s user declines in the first quarter, driven by efforts by NetEase Cloud Music and TikTok parent company ByteDance to gain a foothold in the fast-growing Chinese music market, Tencent Music said online paid music users increased year-on-year 17.7% and 6.7% respectively. quarterly, reaching 94.4 million in the first quarter.
In addition to this reported increase in paid users, Tencent Music noted an improvement in average monthly revenue per paid streaming user of 10.8% year-on-year and 3.4% sequentially, totaling CNY9.2 (US$1.32). -dollars at the current exchange rate).
Although the average social entertainment revenue per paying user rose 1.7% year-on-year to CNY164.50 (US$23.58) in the first quarter, the category’s revenue in the first quarter of 2023 was almost identical to, according to the report those of online music streaming. For just the first three months of 2022, streaming revenue accounted for just 39% of TME’s total quarterly earnings.
“We continue to add increasingly attractive member privileges to our super VIP package,” Chief Strategy Officer Tony Yip responded to a question during Tencent Music’s earnings call. “While we’re not ready to disclose specific numbers, we’re excited about the continued growth in subscriptions to SVIP membership.”
In any case, a nearly 36% year-on-year decline in sales and marketing expenses, along with a slight reduction in cost of sales, contributed to a roughly 85% increase in Tencent Music’s Q1 earnings, which amounted to CNY1.2 billion ( $171.9 million) totaled ).
During today’s trading hours, Tencent Music (NYSE:TME) stock is down 3.64% of its value to trade at $7.67 per share. Elsewhere in its first-quarter earnings analysis, TME said it “helped 260 emerging musicians reach their first million streams” through the “Emerging Force Program” within its overarching “Tencent Musician Platform.”