Tencent Music Entertainment Group said Monday it will set up a record company with a joint venture with Warner Music Group in China, after reporting better-than-expected revenue from higher subscriptions in the fourth quarter.
China’s music streaming platform has also signed an extended multi-year licensing agreement with the US music label. A deal can help Tencent, which has a stake in Universal Music Group, add more exclusive content.
People looking for a variety of entertainment while staying at home during COVID-19 pandemic, join music streaming platforms such as Tencent and Spotify to banish boredom. That helped Tencent Music’s fourth quarter as it added more paying users.
Revenue increased 14.3% to CNY 8.34 billion (approximately 9.270 kroner) for the quarter from a year earlier, beating forecasts of CNY 8.33 billion (approximately 9.260 kroner). Sales were boosted by a 40.4% jump to 56 million paid subscribers in the company’s online music service.
Most Tencent Music users are in its music streaming unit, but the biggest revenue drivers are social entertainment services, including karaoke platforms, where users can stream concerts and live broadcasts. Revenues from social entertainment and other services rose 8.2 percent to CNY 5.58 billion (approximately Rs 6,200).
Excluding items, the company earned CNY 80 (approximately Rs. 890) for U.S. Depository Share (ADS), missing analysts’ average score of CNY 81 (approximately Rs. 900) for ADS, according to IBES data from Refinitiv.
© Thomson Reuters 2021
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