Tencent Music’s Q2 financial results show 47.1m paying music users

Tencent publish their Q2 financial results, showing very impressive subscriber, revenue and profit growth in 2020.

Tencent Music Entertainment’s Q2 financial highlights are as follows:

  • Online music paying users grew 51.9% year-over-year to 47.1 million, with ARPPU (average revenue per paying user) increasing by 8.1% year-over-year.
  • Total revenues were RMB6.93 billion (US$981 million), an increase of 17.5% year-over-year, with online music subscription revenues growing by 64.7% year-over-year to RMB1.31 billion (US$186 million).
  • Net profit attributable to equity holders of the Company was RMB939 million (US$133 million).

Tencent saw a slight fall in mobile monthly active users for online music from 652m in Q2 2019 to 651m in Q2 2020, but an improved online music paying ratio to 7.2% up from 4.8% in Q2 2019. These are active listeners now paying for music through subscriptions and digital album purchases.

Monthly average revenue per paying users (ARPPU) for online music is currently at RMB 9.2 ($1.34), up from RMB 8.6 ($1.24) in Q2 2019, representing an 8.1% growth.

Mobile monthly active users for social entertainment such as karaoke and livestreaming video holds 236m, which is down from 242m in 2019, yet a growth in paying social entertainment users with 12.5m this year, over 11.2m last year. Social entertainment users pay a lot more than music streamers. Monthly ARPPU in Q2 2020 is RMB 125.6 ($18.06). Social entertainment makes up for 68% of Tencent Music’s revenue, where online music makes up the remaining 32%.

These numbers come at a time where Tencent’s messaging app WeChat looks to be getting banned from the US next month. What does this mean for Tencent? What does this mean for the music industry as a whole?

Tencent have signed a continuation of their licensing deal with Universal Music Group and form a new joint venture record label.

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