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Tencent Music Revenues Up 7% to $4.9 Billion in 2021

The Chinese music streamer announced plans to acquire M&E Mobile Limited and conduct a dual listing on the Hong Kong Stock Exchange.

Tencent Music Entertainment’s revenue from music streaming fell 1.4% to $1.19 billion (RMB 7.61 billion) in the fourth quarter, giving the Chinese music streaming giant $4.9 billion (RMB 31.24 billion) of revenue in 2021, up 7.2% from 2020, the company announced Monday.

TME also announced it will pursue a secondary listing on the Hong Kong Stock Exchange to “provide our shareholders with greater liquidity and protection amid an evolving regulatory environment,” CEO Cussion Pang said in a statement. TME shares, which have traded on the New York Stock Exchange since its initial public offering in Dec. 2018, have fallen 86% in the last year since Chinese regulators began to target domestic companies for anti-competitive behaviors and other transgressions.

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The company’s music subscription service added 20.2 million subscribers, a 36.1% gain from 2020, and totaling revenue of $306 million, a 23.5% improvement year over year. Countering the subscriber growth was a 9.6% decline in the online music division’s average revenue per user from RMB 9.4 to RMB 8.5. TME operates four music apps: QQ Music, Kugou Music, Kuwo Music and WeSing. At the end of 2021, its monthly active users stood at 615 million for the music apps and 175 million for WeSing.

Pang attributed the subscriber growth to party to TME’s investment in original content production, which included 117 original songs in 2021 released in conjunction with brands across Tencent’s broader business including gaming, animation, variety shows, film and television.

Long-form audio such as audiobooks and podcasts continue to see improved adoption. TME had 150 million monthly active users listen to long-form audio in the fourth quarter, a 65% improvement from the prior-year period.

The company’s social entertainment business saw its monthly active users fall 21.5% to 175 million and its paying social users decrease 16.7% to 9 million. Its karaoke business will soon get a boost: this month, TME entered into a definitive agreement to acquire a controlling stake in M&E Mobile Limited, the operator of Japan’s leading karaoke app, Pokekara.

Q4 2021 financial performance

  • Total revenues: RMB 7.61 billion (US$1.19 billion), up 9.6% y/y.
  • Online music service revenues: RMB 2.9 billion ($452 million), up 4.3% y/y.
  • Revenues from music subscriptions: RMB 1.95 billion (US$306 million), up 23.5% y/y.
  • Net profit: RMB 577 million (US$91 million), up 110% y/y.

Full year 2021 financial performance

  • Total revenues: RMB 31.24 billion (US$4.9 billion), up 7.2% y/y.
  • Online music service revenues: RMB 11.47 billion (US$1.8 billion), up 22.7% y/y.
  • Revenues from music subscriptions: RMB 7.33 billion (US$1.15 billion), up 31.9% y/y.
  • Net profit of the Company: RMB 3.22 billion (US$505 million), up 29.9% y/y.

Other metrics

  • Online music paying users: 76.2 million, up 36.1% y/y and up 7% sequentially.
  • Music ARPU: RMB 8.5 (US $1.34), down 9.6% y/y
  • Paying ratio (subscribers to total users): 12.4%, up from 11.2% in the third quarter of 2021 and 9.0% in the fourth quarter of 2020.
  • Long-form audio MAUs: over 150 million, up 65% y/y.
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