Tencent Music (TME), the music streaming subsidiary of the China tech giant Tencent Holdings Ltd., raised $1.1 billion in its U.S. initial public offering (IPO), pricing shares at $13 per piece on Dec. 12 local time.
“Music is an important part of Tencent‘s entertainment strategy. Along with long videos, short videos, online games, online literature and podcasts, it defines and builds up China’s pop-culture ecology,” said Tang Daosheng, president of Tencent Music Entertainment Group and senior executive vice president of Tencent.
Spun off from the Tencent Group, TME is the second arm that went public. In November 2017, Tencent‘s online literature platform China Literature launched its IPO in Hong Kong.
“Because of the mergers and acquisitions in Tencent Music’s development, we felt it’s more suitable for a spin-off,” the company president Liu Zhiping said earlier this year.
In 2003, the messaging platform Tencent QQ started to provide an online music streaming service. One year later, another popular music streaming app Kugou Music was born, followed by QQ Music, Kuwo Music, and the karaoke service WeSing.
According to Quest Mobile’s report on China’s mobile music streaming, Kugou, QQ and Kuwo Music topped the list of monthly active users (MAU). The number of their total MAU reached almost seven times that of NetEase, which ranked number four.
“Tencent will support the development of Tencent Music from all aspects, as it always does,” Tang explained. “And Tencent Music is much more than just a service providing users with music experience. We will explore how to connect people with music.”
Tencent music benefits from its belief in social music. Compared with Spotify, which is still trying to make ends meet, Tencent music was reported to be the first music platform that has gained profits. In the first three quarters of 2018, its revenues climbed 83.7 percent year-on-year to 2 billion dollars (13.6 billion yuan).