Tencent Music Entertainment’s (NYSE: TME) Q2 2019 earnings were $859 million, compared with estimated earnings of $843 million. This figure marks a 33 percent hike from 2018’s Q2 revenue.
This increase fell somewhat short of Tencent Music Entertainment’s own predictions. Revenue per music stream increased by about 16 percent — the smallest jump since Tencent Music went public in 2018.
The results sent shares of the music streaming company down 11% in extended trading.
However, paying users rose 33% in online music to a record 31 million, while paying users in social entertainment rose 16.8% to 11.1%.
“In order to provide users a consistent and cohesive listening experience, we are forging Internet of Things partnerships with leading manufacturers of cars, smart speakers and smart watches, which will provide further channels for user acquisition,” says Tencent Music Chief Strategy Officer Tony Yip.
“As part of our internationalization strategy, we are also looking to expand our social entertainment services outside of China, as we take initial steps to explore overseas opportunities for WeSing in South East Asia,” he said.
Tencent Music runs four out of five of China’s top digital music apps, with more than 90% market penetration, but generates much of its revenue from social entertainment services like Karaoke platform “WeSing” or concert live-streaming platform “Kugou Live.”
Such services and platforms brought in RMB4.34 billion ($614 million), the firm said — much more than the online music division, which took in just RMB1.56 billion ($221 million).
Edited from Tencent Music Entertainment