ReutersNov 12, 2019 09:29:02 IST
China's Tencent Music Entertainment Group reported better-than-expected third-quarter revenue on Monday, as the music streaming company added more paying users.
However, the company recorded the slowest rise in a widely watched growth metric for its biggest business, social entertainment services, in the quarter.
Tencent Music's US-listed shares rose as much as 2 percent before trading down about 1 percent in volatile extended trading.
The company's monthly average revenue per paying user from its social entertainment services unit rose 7.4 percent to 127.3 yuan ($18.20), the slowest growth since it went public in December last year.
(Also read: China’s Tencent Music revenue misses estimates, share fall 4%)
Although its music streaming unit has more users, the company's biggest revenue drivers are its social entertainment services — Karaoke platform WeSing' and 'Kugou Live' and 'Kuwo Live' — where users can live stream concerts and shows.
The social entertainment business reported 12.2 million paying users during the quarter, a rise of 23.2 percent from a year earlier.
Although Tencent Music's user base is nearly three times that of world's largest music streaming service Spotify, a peer and a stakeholder in the company, its paying users are comparatively fewer.
(Also read: Spotify launches a family subscription plan in India, priced at Rs 179 per month)
As of the third quarter, Spotify Technology SA has over a 100 million paid subscribers, whereas Tencent Music has about 35 million.
Tencent Music, which has a user base of more than 900 million, has been shifting more of its content behind a paywall since May.
The company, controlled by Chinese tech giant Tencent Holdings Ltd , said paid users of its online music service jumped about 42 percent in the reported quarter.
Tencent Music's net income rose to 1.02 billion yuan, in the quarter ended 30 September from 964 million yuan, a year earlier.
Revenue rose about 31 percent to 6.51 billion yuan, above estimates of 6.45 billion yuan, according to IBES data from Refinitiv.
Excluding items, the company earned 0.74 yuan per American depositary share, above estimates of 0.66 yuan.
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