Tencent Music Reports Significant Subscriber Growth and Revenue Boost in Q2 2024
Tencent Music Entertainment Group (TME) recently released its unaudited financial results for the second quarter of 2024. The results showcased a significant year-over-year growth in subscribers and average revenue per paying user (ARPPU), highlighting the company’s successful strategies in innovation and user loyalty.
TME’s strategic long-term planning and sustainable practices have helped the company navigate various business stages and external challenges. This approach resulted in a solid quarter with a strong 27.7% year-over-year growth in online music services revenue, which amounted to RMB5.42 billion (US$746 million). Additionally, TME reported a 33.1% year-over-year increase in net profit, reaching RMB1.79 billion (US$247 million).
The company’s sustained efforts in membership conversion, user engagement enhancement, and user attraction have collectively led to a 17.7% year-over-year increase in online music paying users, now totaling 117 million.
A crucial driver of TME’s robust growth in online music services revenue was a 29.4% year-over-year rise in music subscription revenues, reaching RMB3.74 billion (US$515 million). This revenue boost was bolstered by an expanded online music paying user base and an improved monthly ARPPU of RMB10.7. TME’s ability to add 3.5 million new music subscribers this quarter underscores its pioneering role and consistent innovation in China’s streaming market. Notably, the rate of online music paying users crossed 20% this quarter.
TME’s strategic focus on enriching its content library, deepening record label collaborations, and producing proprietary content has significantly boosted its ecosystem. Key achievements include successful collaborative licensing agreements with Sodagreen and CJ ENM, and the premiere of notable new releases this quarter, highlighted by the remarkable sales of Zhou Shen’s SHENSELF digital album. TME’s investment in self-produced content has paid off, with two original songs going viral and boosting streams on its platform. Additionally, the company supported major music events, facilitating the first solo tour for artist TIA and hosting the upgraded Tencent Music Entertainment Awards in Macau in July.
By offering personalized benefits such as exclusive music players and ringtones based on popular IPs and artists, TME has significantly enhanced subscriber loyalty. The company’s self-produced content caters to a diverse range of music tastes, while its SVIP service, which offers even more exclusive content and features, has started to gain more traction.
In May 2024, TME declared a cash dividend of US$0.1370 per ADS, totaling US$212 million, which was paid in June. By June 30, 2024, the company’s cash and short-term investments had increased to RMB35.03 billion (US$4.82 billion), up from RMB34.18 billion in March 2024.
