Tencent reaches over $2 billion in music subscription revenue in 2024
China’s biggest music streaming service attributes growth to increased paying users and focus on Super VIP tier.
Tencent Music Entertainment (TME), China’s leading music streaming company, has achieved a major milestone – in 2024, its annual subscription revenue surpassed $2 billion. This milestone reflects significant growth driven by a rising number of paying subscribers and an increased focus on premium services.
In 2024, TME’s subscription revenue experienced a substantial increase of 25.9% compared to the previous year, reaching RMB 15.23 billion (approximately USD $2.12 billion). This growth was driven by a consistent expansion of its paying user base and an improvement in the average revenue per paying user (ARPPU).
The number of paying subscribers saw a notable rise, increasing by 13.4% year-on-year to 121 million in the fourth quarter of 2024, up from 106.7 million in the same period in 2023. This growth indicates a strong and growing user base that is willing to invest in premium music streaming services.
TME’s ARPPU also saw an uptick, rising to RMB 11.10 (approximately $1.54) in the fourth quarter of 2024, up from RMB 10.70 ($1.49) in the same quarter of the previous year. A significant contributor to this increase is, according to TME’s report, the Super VIP (SVIP) tier. Ross Liang, CEO of TME, said, “Our SVIP initiative also recorded solid performance during the fourth quarter, resulting in user engagement improvement and ARPPU expansion.” This tier gained more traction once it began offering enhanced audio quality, AI-powered audio effects, voice extraction, an expanded digital album library, and additional perks for online concerts, such as high-definition modes for select shows.
As of the third quarter of 2024, over 8% of TME’s subscribers were SVIP members, equating to approximately 10 million users. An SVIP subscription costs around RMB 40 per month, five times the price of a regular RMB 8 subscription. This is an interesting insight, as Spotify reportedly looks to launch its own superfan music subscription tier, ‘Music Pro’.
Despite the strong performance in music streaming, TME’s social entertainment services, which include karaoke app WeSing and live concert platform Kuwo Music, faced challenges. Revenues in this segment decreased by 13% year-on-year to RMB 1.63 billion ($226.7 million) in the fourth quarter of 2024. The company attributed this decline to “adjustments to certain live-streaming interactive functions and more stringent compliance procedures implemented.”
Beyond financial achievements, TME has embraced technological advancements by integrating China’s DeepSeek AI model into its music creation features. This integration has “invigorated passion for music creation among our users,” according to the company. By adopting AI, TME has broadened its content base, now offering 260 million licensed and co-created music and audio tracks on its service. The company also uses AI to personalise user experiences through recommendations, comment sections, and AI assistants.
As TME moves into 2025, it aims to further leverage AI to enhance user engagement and explore new business opportunities. With growing competition in the global music streaming industry and evolving listener habits, TME’s strategic focus on innovation and premium offerings will be crucial in shaping its future growth.