It’s quarterly results time for Chinese music-streaming giant Tencent Music Entertainment (TME), and the financials reveal that it ended June 2023 on the cusp of a milestone: 100 million people paying for music across its three services: QQ Music, Kugou Music and Kuwo Music.
TME had 99.4 million paying online music users in Q2, up 20.2% year-on-year. This continues a trend of strong growth for its paying users even as its total monthly active users (including free listeners) falls. MAUs were down 4.7% year-on-year to a still-colossal 594 million people.
Unlike western streaming services, TME’s paying users are not all subscribers: it’s a measure of those but also people buying digital albums from its services. However, TME said in its financials that its revenues from music subscriptions grew 37.2% year-on-year to RMB 2.89bn ($399m).
Overall, TME’s revenues from online music grew by 47.6% to RMB 4.25bn ($586m). This was a tipping point for the company: the first time it has made more money from online music than from its other ‘social entertainment’ category, which is karaoke, livestreaming and other services.
This isn’t just good news for TME’s music-streaming business though: it reflects its challenges in social entertainment. Revenues for the latter were down 24.6% year-on-year to RMB 3.04bn ($419m) with declines in both monthly active users (down 18.1%) and paying users (down 5.1%).
There was also an interesting snippet in TME’s financials about its work with ‘AIGC’ (AI-Generated Content) and music. It has been testing a feature called ‘AI-enabled Listening Together” using an “AI music companion” called Xiaoqin.
The new feature sees her “join users’ music-listening journey, share a variety of topics including her views on music, and recommend songs or playlists based on their real-time interaction”. A counterpart to Spotify’s AI DJ, you could say, although Xiaoqin sounds a few steps more advanced in how it interacts with listeners.