(Reuters) – China’s Tencent Music Entertainment Group beat quarterly revenue forecasts on Monday as a string of original content and a pandemic-driven lockdown helped its Spotify-like music streaming platform attract more paying subscribers.
The company’s U.S. shares rose 3% in after-hours trading after the company said paid online music subscribers jumped by a quarter to 82.7 million. Music subscription revenue rose 18%.
The company also benefited from a push for original content, including a partnership with Tencent Holdings to produce songs for popular games.
However, signs of intense competition and a slowing economy Beijing’s zero Covid-19 policy has triggered pressure on Tencent Music’s business.
Revenue 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 said it plans to support the segment’s growth by adding features such as audio live streaming.
The company, which has been under the scrutiny of regulators, was forced to end exclusive contracts with major music labels last year, undermining its presence among rivals such as Cloud Music and ByteDance-owned short video sharing Strengths Total revenue for the second quarter ended June 30 was 6.91 billion yuan ($1.02 billion), compared with analysts’ expectations of 6.62 billion yuan, according to Refinitiv IBES data. )
Excluding items, the company earned 0.63 yuan per American depositary share (ADS), higher than the expected 0.56 yuan per ADS.
(1 USD=6.7715 RMB)
(Reporting by Tiyashi Datta in Bengaluru; Editing by Aditya Soni)
