Tencent Music Entertainment Group said on Monday it will create a joint venture record label with Warner Music Group in China, after reporting better-than-expected revenue on higher subscriptions in the fourth quarter.
The Chinese music streaming platform also signed an extended multi-year licensing agreement with the US music label. The deal can help Tencent, which owns a stake in Universal Music Group, add more exclusive content.
People looking for a variety of entertainment, while stuck at home during the COVID-19 pandemic, joined music streaming platforms such as Tencent and Spotify to drive away boredom. This helped Tencent Music's fourth quarter as it added more paying users.
Revenue rose 14.3 percent to CNY 8.34 billion (roughly Rs. 9,270 crore) in the quarter from a year earlier, beating estimates of CNY 8.33 billion (roughly Rs. 9,260 crore). The sales were boosted by a 40.4 percent jump to 56 million paid subscribers in the company's online music service.
Most of Tencent Music's users are in its music streaming unit, but the biggest revenue drivers are social entertainment services, including karaoke platforms, where users can live stream concerts and shows. Revenue from social entertainment services and others grew 8.2 percent to CNY 5.58 billion (roughly Rs. 6,200 crore).
Excluding items, the company earned CNY 80 (roughly Rs. 890) per American Depository Share (ADS), missing analysts' average estimate of CNY 81 (roughly Rs. 900) per ADS, according to IBES data from Refinitiv .
© Thomson Reuters 2021
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