Tencent Music Entertainment reports decline in quarterly revenue

The Tencent Holdings-controlled firm said revenue dropped 1.7 per cent to 7.16 billion yuan ($999 million) in the three months ended June 30

China’s Tencent Music Entertainment reported a smaller than expected decline in quarterly revenue on Tuesday, cushioned by a rise in paying subscribers at its music streaming platforms.

The Tencent Holdings-controlled firm said revenue dropped 1.7 per cent to 7.16 billion yuan ($999 million) in the three months ended June 30, the fourth consecutive quarterly decline as it struggles with Beijing’s clampdown on live-streaming.

However, that was just ahead of analysts’ average forecast of 7.14 billion yuan, as per LSEG data, helped by a 27.7 per cent rise at the firm’s online music business.

Revenue from online music services had strong growth, largely offseting the decline in revenues from social entertainment and other services, said Shirley Hu, chief financial officer of Tencent Music, during an earnings call with analysts after the results release.

The number of paying users at the music streaming business increased 17.7 per cent to 117 million, as targeted promotions via telecoms firms as well as e-commerce and video platforms succeeded.

Quarterly revenue at the firm’s social entertainment business, which includes live-streaming, declined 42.8 per cent.

Beijing began a clampdown on live-streaming around a year ago as part of a wider effort to regulate online gambling.

As per analysts, live streamers have sometimes colluded with viewers to manipulate popular lucky draws and share prizes.

In response to the regulatory pressures, Tencent Music discontinued a number of live-streaming features.

During the earnings call, Cussion Pang, executive chairman of Tencent Music, said that the social entertainment business would likely continue to face challenges because of competition, macroeconomic factors and other issues.