TME reports strong subscription growth in Q3, but faces decline in monthly active users

Tencent Music Entertainment (TME), Tencent’s online music streaming platform, reported a robust rise in paid subscribers in the third quarter of 2024. However, this growth came alongside a decline in monthly active users (MAUs) across both its music and social entertainment segments.

TME’s online music service revenue surged 20.4% year-on-year, reaching RMB 5.48 billion (approximately $781 million). The growth was primarily driven by a 15.5% increase in paid subscribers, totaling 119 million, and a 4.9% rise in average revenue per paying user (ARPPU), which now stands at RMB 10.8 ($1.54).

Revenue from online music subscriptions grew 20.3% year-on-year to RMB 3.84 billion ($547 million). This growth underscores TME’s strong footing in converting users into paying subscribers, which remains a key driver of revenue. However, TME’s total MAUs showed a concerning trend, highlighting challenges in attracting and retaining a broader user base. The company’s online music MAUs declined by 3% year-on-year to 576 million, while social entertainment MAUs saw a steeper 30.2% drop, falling to 90 million. This segment, which includes popular karaoke and livestreaming services, experienced a notable fall in both user engagement and revenue. Monthly ARPPU for social entertainment services dropped 24.8% to RMB 64.8, contributing to a 23.9% decline in segment revenue, which now stands at RMB 1.54 billion ($219 million). TME representatives explained that starting from Q2 2023, they began enforcing strict compliance measures and restructuring livestreaming content. This shift to reduce reliance on the social entertainment segment is expected to have continued impact on MAU in the short-term.[TechNodereportingTME release]