Aug 16 (Reuters) - China's Tencent Music Entertainment Group
bettered quarterly revenue estimates on Monday as a
slate of original content helped its music streaming platform
attract more paying users.
The company's U.S. shares rose 5.9% in extended trading
after it said users who paid for online music jumped by a
quarter to 82.7 million. Music subscription revenue of the
platform that operates like Spotify rose 18%.
Tencent Music also benefited from a push for original
content, including a partnership with parent Tencent Holdings
to produce songs from popular game titles.
Its total revenue was 6.91 billion yuan ($1.02 billion) in
the second quarter ended June 30, compared with the 6.62 billion
yuan expected by analysts, according to Refinitiv IBES data.
Cheuk Tung Yip, Tencent Music's chief strategy officer, said
in a call with analysts on Tuesday that the company will
continue to build up its paywall to drive up revenue.
"We expect more content partners will be added to the
paywall in the second half," he said, adding the company was
also committed to catering to non-paying users, who help
generate about 10% of its advertising revenue.
Tencent Music's overall revenue, however, fell 13.8% from
the same quarter of last year, showing that stiff competition
and an economic slowdown sparked by Beijing's zero-COVID policy
were weighing on the music business.
Revenue also fell 20% in the social entertainment business -
the company's biggest revenue driver and home to its karaoke app
WeSing and live concert platform Kuwo Music.
Tencent Music has been in the crosshairs of regulators and
was forced last year to end its exclusive contracts with big
music labels, eroding its advantage against rivals such as Cloud
Music and Bytedance-owned short-video sharing platform Douyin.
Yip, though, said the company is seeing a moderate recovery
from advertisers in the second half in China as COVID-19
outbreaks in the big cities such as Shanghai and Beijing had
been brought under control. He listed e-commerce, consumer
staples and auto as industries experiencing growing demand.
Excluding items, Tencent Music earned 0.63 yuan per American
depository share (ADS) for the quarter, above estimates of 0.56
yuan per ADS.
($1 = 6.7715 Chinese yuan renminbi)
(Reporting by Tiyashi Datta in Bengaluru; Editing by Aditya
Soni and Muralikumar Anantharaman)