China Music-streaming Giant Tencent Music Revenues Fall 15%, losing 11 million MAUs

Communication Author: Yiru Qian May 17, 2022 11:50 AM (GMT+8)

The effects of antitrust were visible on the online music and audio entertainment platform’s Q1 financial performance.

Headphone music

China's Tencent Music Entertainment Group (TME:NYSE) recorded revenue of CNY 6.64 billion (USD 1.05 billion) in the first quarter of 2022, dropping 15.1% from the prior-year period. 

The headwinds in an evolving market landscape were one of the main sparks, said Mr Cussion Pang, Executive Chairman of TME.

Previously, Chinese regulators in July stripped Tencent Music of its exclusive content deals with big music labels - Cloud Music, for example - ordering it to loosen the terms and conditions of its local supply deals with other Chinese rivals.

According to the quarterly report filed on May 17, the gross margin fell 24.6% to CNY 1.86 billion (USD 293 million). Net profit was CNY 649 million (USD 102 million), down 31.5% from the same period of last year.

The quarterly report highlighted the music subscriptions. The number of online paying users rose 31.7% YoY to 80.2 million, which was attributable to content, services, promotions as well as improvement in paying user loyalty, stated TME.

While the monthly active users suffered another decrease. In the first quarter, music MAUs dropped 1.9% year-over-year to 604 million, after falling from 636 million in Q3 to 615 million in Q4. The annual decline in music mobile MAUs was primarily churn of casual users and reduced marketing spending.

Shenzhen-based TME operates QQ Music, Kugou Music, Kuwo Music and WeSing. As of press time, TME shares closed 1.22% higher to USD 4.16 apiece, with a market cap of USD 7.03 billion.