China’s Tencent Music Entertainment Group reported a 39% increase in quarterly revenue as more users paid for its music streaming services.
Tencent Music said in a report that revenue jumped 39% to 5.74 billion yuan ($834.73 million).
Operating profit was RMB1.15 billion (US$171 million), an increase of 22.9% year-over-year.
“We started 2019 with solid first quarter results and strong growth,” stated Mr. Cussion Pang, Chief Executive Officer of Tencent Music. “Our businesses recorded healthy growth rates driven by product innovation, content diversification, and technological advancement.”
Non-IFRS net profit attributable to equity holders of the Company increased by 14.9% year over year to RMB1.20 billion (US$179 million).
Mr. Tony Yip, Chief Strategy Officer of Tencent Music, remarked, “In the first quarter of 2019, both online music and social entertainment services maintained a healthy growth trajectory. Regarding content development, we not only forged additional partnerships with industry-leading music labels but also strengthened cooperation with other labels to promote and distribute original soundtrack music for popular movies and TV shows.”
Tencent Music Entertainment Group continued to expand its industry-leading music library. As of March 31, 2019, the Company’s music library included over 35 million tracks from domestic and international music labels.
Revenues from online music services for the first quarter of 2019 increased by 28.0% to RMB1.61 billion (US$239 million). This figure was mainly driven by increased revenues from user subscriptions, sublicensing music content to other companies . This includes third-party music platforms, Tencent Group and sales of digital music albums.
Revenue from paid music through sales of subscription packages was RMB710 million (US$106 million), up from RMB565 million in the first quarter of 2018.
Tencent Music Entertainment Group expansion
The Company continued to drive product innovation and technological advancement to further expand its monetisation abilities. Tencent Music Entertainment Group is launching the Grab the Mic feature to further improve user engagement on the WeSing app. Company is adding more audio settings including ones that mimic virtual surroundings. This will enhance music content tagging capabilities to increase the accuracy of recommendation algorithms.
Earlier this year, Tencent Music recorded a quarterly loss of $127 million.