Music streaming continues to explode in China – Tencent Music Q4 and full-year 2023 results
Chinese music streaming service Tencent Music saw an over 20% year-over-year increase in paying users at the end of Q4 2023.
Tencent Music is one of the two major music streaming companies in China. Competing against NetEase Cloud Music, Tencent Music operates four apps: QQ Music, Kugo, Kuwou and WeSing. With Tencent Music’s latest earnings release, music streaming shows no sign of slowing in China.
Q4 2023 saw Tencent Music’s overall revenues from online music services jump a massive 41.4% year-over-year, reaching RMB5.02 billion (US$707 million).
The increase was driven by strong growth in music subscription revenues, supplemented by growth in revenues from advertising services and revenues from sales of artist-related merchandise.
Tencent Music’s Q4 2023 Earnings Release
This increase was mostly from music subscription. Here they saw a 45.3% year-over-year growth in revenue, leading to RMB3.42 billion (US$481 million) in the quarter. This is thanks to more paying users and more revenue per users. Paying users increased by 20.6% year-over-year, finishing the year on 106.7 million users, up from 88.5 million in the same quarter last year. Tencent Music’s ARPPU (Average Revenue Per Paying User) for online music was at RMB10.7 (US$1.49), a 20.2% increase compared to Q4 2022. This is still lower than more developed marketing, with Spotify’s monthly ARPU (Average Revenue Per User) at €4.60 (US$4.99) in the same quarter.
The increases in both the number of paying users and ARPPU were primarily attributable to increased user willingness to pay, more appealing member privileges, interactive product features, and attractive music content. The year-over-year increase in revenues from advertising was primarily because we provided a more diversified product portfolio and innovative ad formats, which were well-received by advertisers.
This all lead to a strong year overall for Tencent’s music services, with full-year 2023 revenue for online music services up 38.8% year-over-year, closing the year at RMB17.33 billion (US$2.44 billion). Revenue from music subscriptions alone was up 39.1% compared to 2022, at RMB12.10 billion (US$1.70 billion). Tencent Music added 18.2 million new paying subscribers to their various music apps across 2023.