Tencent Music Entertainment reported a 35% rise in profit on Tuesday after the Chinese music streaming service added 2 million subscribers in the third quarter.
TME reported third-quarter net profit of RMB 1.71 billion ($244 million) and total revenue of RMB 7.02 billion ($1 billion)–increases of 35.3% and 6.8%, respectively, from the third quarter of last year. Music subscription revenue grew by more than 20%, which offset the continued decline in social entertainment revenue that TME has seen for more than a year.
“This quarter's strong music subscription performance, with better-than-expected net subscriber additions and expanding ARPPU, underscores the effectiveness of our balanced approach to achieving growth, which is important to expanding our paying user base in the coming years.” , TME's chief executive officer Ross Liang he said in a statement.
TME added 2 million new paying users in the third quarter, bringing its total number of subscribers to 119 million, which led to a 4.9% increase in the company's average monthly revenue per paying user (ARPPU). This metric is now at RMB 10.8 ($1.50). Music subscription revenue increased to RMB 3.84 billion ($547 million) representing an increase of 20.3% year-on-year.
The company's gross profit margin – the percentage of the company's revenue left over after expenses are paid – rose to 42.6% from 35.7% in the previous quarter, thanks to increased revenue from subscriptions and advertising.
Specifically, TME said the number of SVIP subscribers – a premium tier that costs five times as much as the regular version – topped 10 million in the quarter ended September 30.
Tencent Music executives said partnering with Galaxy Corporation this quarter for K-pop icon G-Dragon's upcoming tour has strengthened its content offerings to audiences.
G-Dragon released his first single in seven years, “POWER,” in October ahead of his tour of Southeast Asia, the Middle East, Hong Kong, Macau, Taiwan, Australia, and New Zealand.
TME stock was trading at $10.46, down 9.48% as of 10:25 a.m. in New York. TME stock is down nearly 18% in the past month, but is still up 19.7% year-to-date.
from our partners at https://www.billboard.com/pro/tencent-music-earnings-profits-streaming-subscriber-growth/
