Tencent Music Entertainment Group, or TME, reported their second quarter 2019 financial results. The online music entertainment conglomerate has pioneered a music streaming service with an inherently social element, allowing users to sing karaoke with friends, and seamlessly share content with each other.
Despite beating profit expectation and growing its number of paying users to a record level, TME’s stock slid 7.3% after hours following its earnings announcement. TME’s revenue during the second quarter was $859 million, beating analyst expectations by $18.07 million.
In terms of strategic growth, Chief Strategy Officer Tony Yip spoke about the company’s intent to forge partnerships with leading IoT manufacturers including automobile, smart speakers and wearables, to develop an immerse music experience in daily life. In addition Yip spoke about TME’s internationalization efforts, including the potential expansion of their social karaoke app, WeSing, into Southeast Asia.
While TME engaged in a share swap with Spotify, TME’s focus on social entertainment services working in tandem with online music really sets it apart from the Swedish company. The monthly ARPPU in TME’s social entertainment segment far outpaces that of online music, differentiating it from the traditional model of online music streaming subscriptions services.