China’s Tencent Music Entertainment Group beat Wall Street’s expectations for second-quarter earnings on Monday, when its advertising business rallied and more people signed up to its music streaming platform.
Subscribers paid for the company’s online music service grew 41 percent to 66.2 million, thanks to investments in long-format audio and an updated music library expanded by licensing agreements with Universal Music Group, Sony Music and others record labels.
Tencent Music shares rose 1.2 percent in extended trading. They lost half their market value this year due to Beijing’s crackdown on its tech giants and a ruling that banned the company’s parent Tencent from exclusive music copyright deals.
The company said it expected the decision to have some impact on its operations, without specifying a number.
The loss of exclusive rights means Tencent Music will likely have to redouble efforts to build a more interactive community while facing the challenge of ByteDance that is using Douyin – the Chinese version of TikTok – to promote music supported by sophisticated algorithms.
Tencent Music’s social entertainment services business, which includes karaoke platforms where users can stream live shows, posted a 7.4 percent increase in revenue to CNY 5.06 billion (about INR 5,800 crores) on quarter and was responsible for most of its revenue.
Total revenue increased 15.5% to CNY 8.01 billion (approximately INR 9.18 billion) but did not reach the Refinitiv IBES estimate of CNY 8.13 billion (approximately INR 9.310 million).
The company earned CNY 0.66 (approximately Rs.8) per US depositary share on an adjusted basis, more than estimates of CNY 0.62 (approximately Rs.7).
© Thomson Reuters 2021