Tencent Music Reports $640M 2020 Net Profit
Spotify is still struggling to turn a profit. Not so for Tencent Music, China’s largest music streamer.
Tencent Music has announced its financial results for 2020, revealing a dramatic increase in revenue amid a decline in monthly active users across the company’s streaming platforms.
In 2020, Tencent’s music streaming platforms, reported aggregate revenue of 9,349,000,000 RMB (roughly $1.42 billion USD) an increase of 32 percent over the previous year.
As well, Tencent reported increases in profit as well, recording a net profit of 4,176 billion RMB ($640 million USD) for fiscal year 2020, an increase of 14% year-over year.
According to Tencent, revenue growth for their music streaming was mainly attributable to an increase of 38.1% in the number of paying users from 24.4 million in 2018 to 33.7 million in 2019 and an increase of 3.5% in the monthly ARPPU from RMB8.5 in 2018 to RMB8.8 in 2019.
However, the total monthly active users of Tencent’s mobile music services declined in 2020, falling from 653 million users in 2019 to 644 million users in 2020.
Tencent operates multiple streaming platforms in China, including mass-market streamer Kugou Music, live streaming platform Kugou Live, Kuwo Music and Kuwo live, which cater to selected genres with a focus on Northern China, as well as online karaoke service WeSing, and audiobook/podcast platform Kuwo Changting.
Tencent attributed the decline to “churn” in its casual user base and was quick to note that more dedicated users were more engaged as a result of product upgrades that included personalization and social tools.
