SHENEN, China (CelebrityAccess) — Chinese music streamer Tencent Music Entertainment Group announced the financial results for the company’s third fiscal quarter of 2023, with revenue down and net profits up during the period.
According to TME, total revenues for the quarter came in at RMB6.57 billion (US$900 million), a 10.8% decrease from the same period in 2022. Tencent attributed the shortfall to a decline in revenue from the company’s social entertainment services and others.
Revenue from music subscriptions was a bright spot for TME, growing by 42.0% year-over-year to RMB3.19 billion (US$438 million). TME attributed the growth to a solid increase in the number of paying users for the service, which was up to 103 million during the quarter, 20.8% more than the same period in 2022.
Other user statistics were mixed, with total monthly users of the music service falling to 594 million, down by 4.2%. TME’s mobile social media entertainment platform saw steeper declines with monthly active users declining by 16.8% to 129 million and more concerning for the company’s advertisers, monthly average revenue per paying user (ARPPU) falling by a whopping 51.4%.
Net profits for the quarter improved as well, with TME report takings of RMB1.26 billion (US$173 million), an improvement of 15.6% year-over-year.
“Our dual-engine content-and-platform strategy continues to pay off. In the third quarter, we reported strong growth in our online music services despite the topline headwinds from the social entertainment business. The accelerated year-over-year subscription revenue growth was supported by expansion in both subscriber base and ARPPU. Our evolving ecosystem and resilient businesses enabled us to deliver a group-wide margin expansion. These achievements further unlock the value of music and pave the way for our sustainable development in the long run,” said TME Executive Chairman Mr. Cussion Pang
“The third quarter results highlight efficiency gains across our platforms. Our ecosystem’s strength, platform’s scale and AI-empowered technological edges have enabled us to transition into an increasingly robust music powerhouse. Online music has more visibly become our core business, driving engagement and earnings growth, while we adjust our social entertainment offerings. We will continue to reimagine the way music connects with people, creating a more enjoyable user experience through technology and product innovation,” added Ross Liang.