Tencent Music now generates over $2bn from music streaming subscriptions yearly

Tencent Music Leisure, China’s largest music streaming firm, reported forecast-beating monetary outcomes for the fourth quarter and full-year 2024, with annual subscription income surpassing the $2 billion milestone.

Annual subscription income surged 25.9% YoY in 2024 to RMB 15.23 billion (USD $2.12 billion on the common change price for 2024) from RMB 12.1 billion in 2023 (USD $1.71 billion on the common change price for 2023), in line with TME’s newest monetary report revealed Tuesday (March 18).

The corporate attributed this efficiency to the constant enlargement of its paying consumer base and improved common income per paying consumer (ARPPU), which in flip was partly boosted by its ‘Tremendous VIP’ (SVIP) tier.

TME’s paying subscribers elevated 13.4% YoY to 121 million in This autumn 2024 from 106.7 million in This autumn 2023. This additionally displays an addition of 2 million subscribers between Q3 and This autumn 2024. ARPPU rose to RMB 11.10 ($1.54) in This autumn from RMB 10.70 ($1.49) in This autumn 2023.

“2024 was a 12 months of strong progress for TME, marked by robust efficiency in our on-line music enterprise driving total income development and increasing revenue margins,” mentioned Cussion Pang, Govt Chairman of TME, within the earnings launch.

Ross Liang, CEO of TME, mentioned, “Our SVIP initiative additionally recorded strong efficiency in the course of the fourth quarter, leading to consumer engagement enchancment and ARPPU enlargement.”

Again in Q3, Tencent Music famous that over 8% of its subscribers are Tremendous VIP, equal to 10 million customers. An SVIP subscription prices round RMB 40 per 30 days, 5 occasions as a lot as a common RMB 8 subscription.

The success of Tencent Music’s SVIP tier comes at a very attention-grabbing time as Spotify is reportedly getting ready to launch its personal super-premium tier. Throughout an earnings name in July final 12 months, Daniel Ek mentioned Spotify will likely be launching a brand new “deluxe” tier that might embody entry to “superfan golf equipment” and new playlisting and tune administration instruments.

TME mentioned its SVIP tier gathered extra traction after it rolled out enhanced audio high quality and results together with AI-powered audio results and voice extraction, an expanded digital album library, and the rollout of extra perks for on-line concert events, corresponding to high-definition modes for some reveals.

For the entire 12 months, TME’s income from on-line music providers jumped 25.5% YoY to RMB 21.74 billion ($3.02bn) from RMB17.33 billion ($2.45bn) in 2023. The corporate mentioned this was pushed by robust development in music subscription revenues, in addition to income from promoting providers. General, income for 2024 edged up 2.3% YoY to RMB 28.40 billion ($3.95bn).

In This autumn alone, income from on-line music providers edged up 16.1% YoY to RMB 5.83 billion ($811.1m), pushing total This autumn income greater by 8.2% YoY to RMB 7.46 billion ($1.04bn), beating the typical analyst estimate of seven.30 billion yuan, in line with knowledge compiled by LSEG.

Regardless of its robust efficiency in music streaming, TME’s social leisure providers  — which incorporates karaoke app WeSing and reside live performance platform Kuwo Music — continued to say no, with revenues lowering 13% YoY to RMB 1.63 billion ($226.7m) in This autumn. The corporate attributed the drop to “changes to sure live-streaming interactive features and extra stringent compliance procedures carried out.”

MAUs for the social leisure phase fell 21.2% YoY to 82 million in This autumn, whereas paying customers decreased by 3.8% to 7.7 million. The social leisure ARPPU additionally declined, down 9.7% to RMB 70.40 ($9.79).

TME’s internet revenue attributable to shareholders for 2024 surged 35% YoY to RMB 6.64 billion ($923.6m), or RMB 4.24 per diluted share. In This autumn alone, attributable internet revenue jumped 49.8% YoY to RMB 1.96 billion ($272.6m), or RMB 1.26 per share, topping the analyst consensus of RMB 1.22.

Past the often reported numbers, TME disclosed that it has integrated China’s DeepSeek AI mannequin (which despatched world markets right into a frenzy earlier this 12 months) into its tune creation options. The corporate mentioned integrating DeepSeek “invigorated ardour for music creation amongst our customers.”

By adopting AI, TME mentioned it has broadened its content material base, now providing 260 million licensed and co-created music and audio tracks on its service — considerably greater than the “over 100 million” Spotify reported in its most up-to-date fiscal 12 months report.

TME mentioned its AI implementation extends past creation to personalization by means of integration with AI assistants, remark sections, and advice pages.

Looking forward to 2025, Liang mentioned the corporate goals “to harness the energy of AI to personalize our providers and convey extra new experiences to customers.”

Music Enterprise Worldwide