Author | Wen Yehao

Editor | Wu Xianzhi

On May 12th, Tencent Music unveiled its financial results for the first quarter of 2026.

The report indicates that Tencent Music's total revenue for the first quarter of 2026 reached 7.90 billion yuan, marking a 7.3% year-on-year increase. Adjusted net profit climbed to 2.33 billion yuan, up 4.8% year-on-year, while adjusted EBITDA rose to 2.83 billion yuan, a 10.5% increase over the previous year.

In a streaming media landscape characterized by widespread contraction and stagnation, these figures, while not astonishing, are certainly commendable.

However, the stories that truly captivate lie beyond the financial metrics. Tencent Music has officially rebranded its longstanding 'Online Music Services' to the more expansive and intriguing 'Music-Related Services.'

In response, Tencent Music clarified that this renaming more accurately reflects the nature of its business lines. Yet, from the perspective of online music industry competition, this move appears to be a deliberate reveal by Tencent Music, with implications that extend far beyond the literal interpretation.

The journey of music players may eventually reach a plateau, while the boundaries of the music business continue to expand and diversify.

Tencent Music Seeks More Than Just 'Revenue from Song Listening'

Business names often serve as beacons, signaling to the outside world what a company offers and hinting at its self-perception and the era it inhabits.

'Online Music Services' largely aligns with the narrative of the previous generation's industry, a business model centered around 'song listening.'

The logic underpinning this business is straightforward, supported by factors such as music libraries, memberships, playback, paid rates, and ARPPU. Almost all competition revolves around these variables, and Tencent Music has, over the years, pushed this model to its limits, from acquiring copyrights to enhancing sound quality.

The financial report reveals that Tencent Music's revenue from membership services in the first quarter of 2026 reached 4.57 billion yuan, a 6.6% year-on-year increase, still serving as the bedrock of its business.

However, examining the year-on-year growth rates alone, two years ago it was nearly 40%, and a year ago it was 16.6%. The steady decline in growth is not due to Tencent Music's underperformance but because the concept of 'paying to listen to songs' is nearing its limit.

After all, time is a finite resource—it cannot be conjured out of thin air or infinitely divided. A person has only 24 hours in a day and two ears. No matter how much music streaming services extend listening times, they cannot, like short videos, consume hours of user attention at once.

Thus, Tencent Music has begun to bypass the narrow path of 'how to make users listen to more songs' and instead contemplates 'how to sell the same song' to extract more value from the music itself.

For Tencent Music, actively shedding the 'Online Music' label is akin to removing the old 'record store' signboard from its storefront and replacing it with a new one reading 'music department store.'

While this may sound abstract, when translated to the business level, it is not.

Thorstein Veblen, in 'The Theory of the Leisure Class,' introduced the concept of conspicuous consumption, emphasizing that the value of some consumption lies in social display, identity differentiation, and being seen and recognized by others.

The same principle applies to music consumption. When users pay for music, it is often not just for 'song listening.' They might be purchasing a digital album from a favorite artist, a physical collectible like an NFC card, or wanting to attend a live concert.

It is reported that in the first quarter of this year, Tencent Music exclusively released Jay Chou's 25th-anniversary commemorative album 'Son of the Sun.' As of now, the combined sales of this digital album and physical collectibles have surpassed 100 million yuan. The same logic applies to other artists like Wang Sulong, BLACKPINK, and EXO.

The financial report shows that Tencent Music's revenue from non-membership music-related services in the first quarter of 2026 reached 1.94 billion yuan, a 28.0% year-on-year increase; among this, revenue from offline performances achieved triple-digit year-on-year growth.

This may be precisely where Tencent Music's reevaluation is most warranted—pulling the light behavior of 'song listening' out of the player, placing it into a longer consumption chain, and transforming it into a substantial transaction.

However, Tencent Music, whose business model appears to have 'evolved,' no longer discloses quarterly online music MAU, paid users, and ARPPU at this stage. It explains that with the expansion of advertising and IP-related businesses and the parallel operation of multi-tier memberships, the contribution of individual paid members to the business varies greatly, and the company is more focused on revenue and profit.

Regardless of whether these reasons are justified, capital markets inherently dislike opacity. Therefore, if Tencent Music, having discarded its old benchmarks, wishes to fully convey its new narrative and make the outside world truly understand this value upgrade, it may need to proactively provide more new indicators that align with the story in the future.

AI Music is Inexpensive, but Jay Chou Remains Valuable

At this stage, the AI wave is equally reshaping all content industries, and the music sector is no exception. Among domestic online music platforms, Tencent Music, with the deepest copyright barriers, undoubtedly stands at the forefront of this trend.

When discussing AI music, outsiders often mistakenly categorize all music as the same commodity and judge its value with the same logic.

But reality is never so uniform.

Consider a simple example: players of the JRPG game 'Xenoblade Chronicles 2' might be struck by the BGM 'Counterattack' during a certain story segment and add it to their playlist afterward. For that player, this song is no longer just a game BGM but is connected to a certain memory, emotion, or even a stage of life.

However, stepping outside this hypothetical scenario, for other ordinary listeners who have never played 'Xenoblade Chronicles 2' and have no emotional attachment to the story, adding the passionate and surging 'Counterattack' to their playlist, mixed with other AI-generated, emotionally charged instrumental tracks, may not reveal any essential difference.

This is the subtlety of music consumption—often, users are not just consuming the audio itself but the context, story, and self-projection behind the sound.

The issue is that many users may not seek such 'emotional premiums' when listening to music.

This is not a new topic. In fact, long before the advent of AI, the aesthetic divide between elite, hardcore audiences and the general public has always loomed over content industries like film and gaming.

Many film enthusiasts who pride themselves on their aesthetic taste and have spent years immersed in art-house films never understand why so many people flock to theaters to pay for movies like 'Detective Chinatown 3,' which they look down upon; so-called hardcore gamers also fail to grasp why, with such an abundance of games available today, some people remain deeply addicted to the poorly reviewed 'Sanguosha.'

The so-called 'snobbery chain' in the content industry has always existed, but with the AI boom, the target of criticism in the film industry has shifted to AI-generated short dramas; during the era of copyrighted music, there were still plenty of 'pop songs' with polarized reputations, and now the criticism is directed at AI music.

However, there has never been a single value scale for content consumption.

For many viewers, watching a film does not require obsessing over whether the characters are well-developed or whether the plot is logical—it is simply a way to pass the time. Many gamers do not necessarily seek depth in world-building or gameplay; they just want entertainment.

The same applies to the music sector. If someone just wants some relaxing music to drown out the navigation sounds while driving and prevent the car from feeling too monotonous, then having AI generate a 'light electronic track with an urban nighttime atmosphere' might suffice.

After all, music consumption is not always solemn. Users are not constantly searching for a soulmate in their earphones every day, nor do they care whether the music is composed by AI or whether the music itself has a story. They are even less likely to suddenly tear up at a red light and begin reflecting on the hidden aspects of their lives.

This is the true entry point for AI music at this stage—first penetrating markets for functional and situational music that do not require creating meaning but merely fill gaps. It is foreseeable that as AI music continues to evolve, scenarios like study music, sleep music, fitness music, and café Lo-fi, which are already close to 'sound consumables,' will be rapidly industrialized by AI.

In recent years, the rapid rise of platforms like Qishui Music, which focus less on copyrights, also confirms the existence of a user base that is indifferent to the thickness of copyrights but highly sensitive to scenarios and algorithmic recommendations.

QuestMobile data shows that in March 2026, Qishui Music's monthly active users reached 156 million, surpassing NetEase Cloud Music for the first time and ranking among the top three domestic online music apps. Ahead of it are Kugou Music and QQ Music, both owned by Tencent Music.

For Tencent Music, while the rapid growth of Qishui Music warrants vigilance, in terms of long-term music consumption, Tencent Music still holds the strongest copyright and mindshare moats in the domestic music industry and has no need to panic.

Therefore, while Qishui Music may enrich its music content supply with AI, it is unlikely to prevent Tencent Music from selling high-value music IPs at a premium—even if AI makes music infinitely cheap, Tencent Music aims to prove that music carrying memories and relationships remains invaluable.

Ximalaya: Tencent Music's 'Safeguard Against the Storm'

In June 2025, Tencent Music announced an acquisition plan to fully acquire Ximalaya, the largest domestic audio platform.

Nearly a year later, the deal has finally reached its final step. On the day of this quarter's financial report release, Tencent's acquisition of Ximalaya was officially approved, albeit with several restrictive conditions imposed by law.

In simple terms, Tencent Music is prohibited from raising prices for online audio, reducing the proportion of free content, engaging in exclusive copyright deals, forcing 'onboarding' or 'either-or' choices, or restricting hosts from earning a living across multiple platforms—these restrictions essentially tell Tencent Music not to attempt a repeat of its previous copyright war tactics in the long-form audio sector.

For Tencent Music, regardless of its original intentions, what it seeks from acquiring Ximalaya now may no longer be a weapon for platform wars but a puzzle piece to fit into specific scenarios.

After all, in an era dominated by short videos, audio consumption, especially long-form audio, represents a resurgence of 'slow attention'—while not as frequent as listening to songs, it is highly effective at occupying commuting, bedtime, and in-car scenarios that are vulnerable to AI encroachment.

Among these, cars are an old battleground for music and audio consumption and may also be where AI music and long-form audio face off in the future.

With music copyrights and long-form audio content, Tencent Music could theoretically throw a one-two punch in the in-car arena, but the aforementioned regulations explicitly prohibit bundling platform services with automakers or obstructing their procurement of competitor products.

This means Tencent Music cannot pry open car doors with brute ecological force or stuff automakers until they choke; it can only compete on experience and truly deliver compelling content.

On the other hand, if Tencent Music were to double down on AI music and fight fire with fire, that could also be a solution. However, it has always built its moat around copyrights, and the more it emphasizes authenticity, IP, and content scarcity, the harder it is to embrace another possibility without restraint.

Although Tencent Music recently launched the AI music app 'VEMUS Weiyin,' it is still in its early exploratory stages and remains 'distant water' that cannot quench near-term thirst.

For now, what can truly counter AI music for Tencent Music must be an immediate 'antidote.' Ximalaya's mature and robust long-form audio ecosystem, like a 'Safeguard Against the Storm,' will help Tencent Music withstand the AI impact and maintain its user base—it is both what Tencent Music needs at this stage and one of the few certainties it can hold onto.

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