Original title: “Jay Chou Effect” Shows Tencent Music Paying Users Increased by 42% Source: CICC Online
On November 12, Tencent Music Entertainment Group issued a report card for the third quarter of 2019 to foreign countries. Total revenue and operating profit showed an increasing trend. It is worth noting that Tencent Music Entertainment Group's paid subscribers increased by 42.2% year over year. This is undoubtedly due to the contribution of many exclusive copyrighted songs represented by Jay Chou.
According to the unaudited financial report for the third quarter of 2019 released by Tencent Music this time, Tencent Music Entertainment Group achieved a total revenue increase of 31% year-on-year to 6.51 billion yuan during the reporting period. In addition, its profit also achieved year-on-year growth, of which operating profit was 1.19 billion yuan, an increase of 11.9% over the same period last year, and net profit attributable to the company's shareholders was 1.03 billion yuan, an increase of 6.4% year-on-year.
In terms of various businesses under Tencent Music Entertainment Group, data shows that in the third quarter of 2019, its online music service revenue increased from 1.46 billion yuan in the same period last year to 1.85 billion yuan, an increase of 26.2% over the same period last year, mainly due to the increase in revenue from music subscription services and digital album sales. In terms of social entertainment services, during the reporting period, Tencent Music Entertainment Group's business revenue in this area increased from 3.51 billion yuan in the same period last year to 4.66 billion yuan. The reason is the increase in revenue from the company's online K-songs and music-centered live streaming business.
It is worth noting that Tencent Music Entertainment Group achieved a significant increase in the number of paying users this quarter. As of the third quarter of 2019, its online music payment users reached 35.4 million, up 42.2% year on year, net increase of 4.4 million over the previous quarter, higher than 2.6 million in the second quarter of the same year and 1.4 million in the first quarter, marking the biggest net increase since 2016. At the same time, ARPPU for online music increased 3.5% month-on-month, the number of paid users of social entertainment services also increased 23.2% year over year, and ARPPU increased 7.4% year over year. In response, Hu Min, chief financial officer of Tencent Music, said, “Based on the significant increase in paid users and the increase in ARPPU, Tencent Music's online music subscription revenue rose sharply year over year, with a growth rate of 48.3%.”
Among them, Tencent Music has obtained exclusive copyrights from singers with a large number of listeners, such as Jay Chou, providing a lot of help to the music platform's data growth in terms of online music service revenue and paid users. The release of Jay Chou's new song, which received top traffic, had a positive effect on Tencent Music's digital album sales. At 23:00 on September 16 this year, Jay Chou's “Say OK, Don't Cry” single released by Jay Chou sold 6.66 million copies on QQ Music alone, with sales revenue of nearly 20 million yuan. At the same time, this single is also the highest-grossing digital single in the history of the QQ music platform, and the first digital single to break through the Golden Diamond Records certification.
It is worth noting that the release of Jay Chou's new song has also led to an increase in user activity of Tencent Music's K-song software. Tencent Music said in its financial report that over 12 million K-song recordings have been recorded 10 days after the song was released. At the same time, exclusive singer copyright also plays a significant role in driving revenue for Tencent Music's main revenue pillar — social entertainment services and other services.
In addition, Tencent Music has also experimented with the deep integration of online music and social entertainment in other related projects. For example, during the TFBOYS 6th anniversary concert, Tencent Music provided a live broadcast and enabled fans to express their appreciation for idols through online virtual gift giveaways. In addition to this, at present, Tencent Music has also gradually established a long-term, stable, and mutually beneficial fan economy platform for musicians, and has introduced a large number of PGC and UGC short video content on the music broadcasting platform. It has also added new forms of content such as micro-variety shows and new features such as universal chorus to the national K-song platform to further enhance the social attributes of the platform.
“Although users' demand for online music platforms is more diversified at this stage, high-quality content is still the basic usage requirement of users, and this will not change in the future.” According to music critic Wang Le, the more innovative user experience and functional services need to be based on content. Without high-quality and continuously updated content, it is difficult to retain users for a long time, even the best service.