SHENZEN, China (CelebrityAccess) — On Tuesday, Chinese music streamer Tencent Music Entertainment Group announced its results for the third fiscal quarter of 2020, with revenue topping $1.12 billion for the period.
According to TME, online paying users of its music services grew by 4.6 million in the quarter, for a total of 51.7 million subscribers, up by 46% year-over-year.
Subscription revenue was up as well, increasing 55% year-over-year to $215 million in Q3.
However, TME reported that the cost of that revenue was up by 19.1%in the third quarter, to $754 million which the company attributed to investment in development and “increased revenue sharing” required to keep the platform competitive.
At the same time, Tencent reported significant declines in its non-music social media, where subscriptions dropped by 14.6% in the quarter and its mobile social entertainment products, where monthly active users fell by 4.6% for the quarter.
“Third quarter results reflect significant progress in our ability to unlock the opportunities that are present in China’s dynamic online music industry as we achieved 55% year-over-year growth in online music subscription revenue with increasing paying ratio. In addition, our overall gross margin expanded at a healthy clip compared with the prior quarter, thanks to the continuous execution of our business strategy and improving operational efficiency,” said Mr. Cussion Pang, Chief Executive Officer of Tencent Music. “This strong performance reflects our philosophy of quality growth, investing with discipline and the unwavering pursuit to improve user satisfaction.”
“Expansion of our music library and diversification of our content offering continued, with more video and long-form audio now available. We enriched online music streaming by adding visual, interactive and social attributes to our products, including offering a whole new level of online concert experiences through TME Live. For online social entertainment services, we are pleased to see sustained recovery. Operationally, we continue to focus on optimizing our product features, particularly those related to community building and video enrichment, to improve user experiences and enhance our long-term competitiveness,” concluded Mr. Pang.