Tencent Music Entertainment Group (TME) on Nov. 10 released its unaudited financial results for the third quarter ended Sep. 30, 2020.
Over the three months, online music paying users reached 51.7 million, increasing by 46% year-on-year and growing by 4.6 million compared to the last quarter, witnessing the largest net increase since 2016.
The NYSE-listed online music platform generated a total revenue of 7.58 billion yuan in the past quarter, marking a rise of 16.4% compared to the same period last year while the online music subscription revenues increased by 55% year-over-year to 1.46 billion. The net profit attributable to equity holders of TME was revealed to be 1.13 billion yuan over the quarter, increasing by 9.7% year-on-year, and the non-IFRS net profit was 1.35 billion yuan in the same period.
The Tencent-backed music platform showed robust growth in gross profit, showing an increase of 11.2% to 2.64 billion. The gross margin for the third quarter of 2020 decreased by 1.6% to 32.4% from 34% for the same period of 2019 mainly due to increased investments in new product and content offerings including long-form audio and increased revenue sharing fees, according to an explanation in the report.
The past quarter saw the platform’s continuing expansion in the TME Live unit, a sector which brings users live concerts from their mobile devices, offered more than 30 ultra-live online concerts from iconic artists including famous English singer-songwriter Jessie J and Hong Kong stars Andy Lau and Eason Chen. The livestreamed concert business has currently attracted sponsorship from brands including Adidas, Bose, Skoda and Freeplus.
TME also summarized its efforts in helping indie musicians protect original music to reach a broader user-base. The platform in the past three months saw triple-digit year-on-year growth in both the number of indie musicians as well as their works uploaded on TME’s platforms including QQ Music, Kugou Music, Kuwo Music and WeSing.
“Third quarter results reflect significant progress in our ability to unlock the opportunities that are present in China’s dynamic online music industry,” Cussion Pang, CEO of Tencent Music said in the report. “This strong performance reflects our philosophy of quality growth, investing with discipline and unwavering pursuit to improve user satisfaction.”