SHENZEN, China (CelebrityAccess) — Revenue was up but profits took a hit for Tencent Music Entertainment Group during the company’s 3rd fiscal quarter of 2021.
According to TME, the company recorded overall revenue of 7.81 billion (US$1.21billion), an increase of 3% over the same period in 2020. That growth was fueled by gains in revenue from TME’s music streaming services, which saw gains of 24.3% year-over-year, including revenue from subscriptions, which generated RMB1.90 billion (US$295 million), representing 30.2% year-over-year growth.
Total paying subscribers across all of TME’s platforms reached 71.2 million, increasing by 37.7% year-over-year as Chinese consumers shift to on-demand streaming.
However, operating profit for TME declined to was RMB919 million (US$143 million) in the third quarter of 2021, compared to RMB1.26 billion in the same period of 2020.
Net profit attributable to equity holders of the Company in the third quarter of 2021 was RMB740 million (US$115 million), compared to net profit of RMB1.13 billion in the same period of 2020.
Tencent Music also reported that monthly active users for online music declined slightly for the 3rd quarter of 2021, down to 636 million from 646 million last year, representing a change of 1.5%
Monthly average revenue for users also declined during the quarter, falling to 9.4RMB, down 5.4% from the same period in 2020.
TME attributed the shortfalls to regulatory changes and industry competition.
“In the third quarter, our online music services delivered healthy growth driven by strong momentum in subscriptions as users continue to be attracted by our enhanced music streaming experience. While the online music industry in China is adapting to regulatory changes and facing competition for time spent from short video services, we will continue to differentiate both our online music and social entertainment services and execute our dual engine content-and-platform strategy,” said Mr. Cussion Pang, Executive Chairman of Tencent Music Entertainment Group (TME). “In parallel with our efforts to promote the healthy and sustainable development of the music industry in China, we have made meaningful strides to build and expand our capability in music creation, discovery, promotion and monetization. In addition to increased investments in the production of high-quality music, we have allocated more resources to support and cultivate indie musicians and original music through our Tencent Musician Platform, with the goal of establishing our platform as the preferred destination for music enthusiasts.”
“To better serve our users, we are strengthening our platform’s capability to provide music lovers with more video-based content, share their passion for music within our community and have a more socially-engaging experience. In this regard, we have launched several initiatives that are showing encouraging progress, including upgraded video and social features on QQ Music and Kugou Music. Moreover, our efforts to expand long-form audio content offering and features have resulted in long-form audio MAUs exceeding 140 million, growing by 89% year-over-year, as our users discover the complementary experience of music and audio streaming,” commented Mr. Ross Liang, CEO of TME. “We continue to embrace and collaborate with the broader Tencent ecosystem through multiple cross-platform partnerships with Weixin, Tencent Games and Tencent Video. With innovative product features and rich content partnerships, we expect these win-win collaborations to further expand our user reach and content offering, while simultaneously fulfilling the music needs of users on Tencent’s platform,” concluded Mr. Liang