Tencent Music earnings

Tencent Music achieved continued subscriber and profit growth during Q3 2024, per a new earnings report. Photo Credit: TME

Despite suffering another revenue decrease on the non-streaming side, Tencent Music has reported double-digit subscriber and profit growth for 2024’s third quarter.

These and other performance particulars came to light in the Shenzhen-headquartered company’s newly released Q3 earnings report. Previously, 2024’s first and second quarters saw Tencent Music acknowledge year-over-year revenue slips due mainly to declines in the “social entertainment” category, including livestream concerts and more.

Social entertainment’s long-running slide, traceable in part to an operational recalibration enacted following a sweeping regulatory crackdown, continued during 2024’s third quarter. Per Tencent Music, social entertainment mobile MAUs fell 30.2% YoY to 90 million.

Additionally, social entertainment’s monthly average revenue per paying user decreased 24.8% YoY to $8.96 (CNY 64.8), with the category’s paid user count having grown 1.3% YoY to 7.9 million, the report shows. Nevertheless, higher-ups described the WeSing karaoke app’s Q3 revenue (which falls into social entertainment) as “better than expected.”

While the results contributed to an overall Q3 2024 revenue miss for Tencent Music (which operates three distinct streaming services in QQ, Kugou, and Kuwo), an ongoing subscriber-base expansion fueled the initially mentioned profit jump.

That refers specifically to an even 119 million paid users for Tencent Music during the third quarter, up 15.5% YoY and two million quarterly, with 4.9% YoY growth in monthly average revenue per streaming subscriber at $1.49 (CNY 10.8), the resource shows.

Total revenue from on-demand subscriptions is said to have finished at $530.91 million (CNY 3.84 billion), for a 20.3% YoY boost. Notwithstanding the subscriber positives, however, Tencent Music’s streaming MAUs dipped 3% YoY to 576 million, according to the company.

Taken as a whole, Tencent Music’s Q3 2024 earnings call didn’t deliver any groundbreaking revelations from execs, who reiterated broad objectives of maximizing subscriber growth, enhancing ARPU, and adding fresh features.

Perhaps the most noteworthy of those features center on superfan monetization, now a bigger focus than ever for the wider industry. Tencent Music is rallying around a “Super VIP” (SVIP) package boasting enhanced audio quality and “enriched long-form audio offerings”; this more expensive tier had over 10 million subscribers as of September 30th, per higher-ups.

Roughly half these subs were attached to QQ, with the remaining half coming from Kugou, execs said during the earnings call. Interestingly – and bearing in mind, among other things, Tencent Music’s reach and seemingly strong relationships with leading K-pop players – physical products like calendars could soon factor into the SVIP plan, according to TME.

At the time of writing, Tencent Music stock (NYSE: TME) was down 9.65% at $10.44 per share – though the price still represents an over 40% increase from mid-November 2023.