For enterprises, it is quite rare to possess a steady growth momentum and deliver performance marked by the word 'stability' in the current environment.

Written by|Lan Dong Business Zhao Weiwei

In 2024, the continuous prosperity of the offline music performance market undoubtedly injects new vitality into the music industry.

Meanwhile, the online music market has also ushered in a new stage of development, a trend evident from Tencent Music Entertainment Group's latest Q3 2024 financial report.

The report shows that Tencent Music's total revenue reached 7.02 billion yuan, an increase of 6.8% year-on-year, with adjusted net profit at 1.94 billion yuan, a 29.1% year-on-year increase. Among them, online music service revenue, online music subscription revenue, and the number of online music paying users all increased year-on-year.

'Stability' has become a keyword for Tencent Music's future medium- to long-term development. For Tencent Music, which maintains a leading position in the industry, its online music business will maintain a healthy growth momentum under refined operations, forming the foundation for growth.

For enterprises, it is quite rare to possess a steady growth momentum and deliver performance marked by the word 'stability' in the current environment.

Steady increase in user value

Good music is the greatest common divisor of people's hearts.

Music can carry the most subtle and hidden emotions within us, conveying them through the ups and downs of melodies and lyrics. This form of content, which accompanies us everywhere and has strong penetration in various scenarios, is unattainable by many other forms of content. Thanks to music's inherent ability to carry emotions, a closer connection is established between music platforms that provide good music and their users.

In June last year, Tencent Music surpassed 100 million paying online music users, with a monthly ARPPU of 9.7 yuan; by the third quarter of this year, Tencent Music's user base continued to grow along an upward curve: the number of paying online music users increased by 15.5% year-on-year to 119 million, and the average monthly revenue per paying user (ARPPU) further increased to 10.8 yuan.

This continuously growing data not only verifies the potential of China's online music market but also validates Tencent Music's continuously improving ability to meet user needs.

Understanding one of the focuses of Tencent Music's 'stability' lies in enhancing user value.

In this quarter, Tencent Music achieved a rare high-quality growth with both the scale of paying online music users and ARPPU increasing, and both basic and super members developing together, demonstrating the effectiveness of Tencent Music's 'balanced growth strategy'.

For the current music market, a steady and sure approach, with a balanced and coordinated development of 'quantity' and 'quality', is the only way to achieve long-term sustainable development.

For users with higher music needs, Tencent Music offers further content benefits and membership experiences. Currently, Tencent Music provides super members with more digital albums that can be listened to for free, including high-quality digital album content such as Jay Chou's 'The Greatest Work,' JJ Lin's 'Write Our Story,' Jolin Tsai's 'UGLY BEAUTY,' and Wang Yibo's 'Bystander.'

In addition, super members enjoy more benefits such as fan activity perks and exclusive concert pre-sales. In terms of music experience, super members can also choose higher-quality audio and sound effects: QQ Music's Supreme Sound Quality, DTS Sound Quality, KuGou Music's Viper Ultra HD Audio, among others, offering a clearer and more immersive music experience.

Continuous refined operations and abundant user benefits have brought more high-value users to Tencent Music. Tencent Music disclosed for the first time in its Q3 financial report that the number of super members (SVIP) exceeded 10 million by the end of September 2024.

To maintain a steady increase in user value, it is necessary to continuously enhance content and experience for music paying users who already have full trust in the platform and higher needs, further enhancing user stickiness and keeping this positive cycle in motion – this is the solution currently provided by Tencent Music, and it appears to be quite effective.

The 'New' in the Music Market

Currently, China's music market is a rapidly growing one: according to data from the IFPI (International Federation of the Phonographic Industry), China's music market grew by 28.4% globally in 2023, solidifying its position as the fifth-largest market globally and the second-largest in Asia, with this growth rate also being the fastest among the top ten markets globally.

How to continuously expand the boundaries of this vast market and bring new ideas is a direction being explored by every music platform.

In an industry where content is king, the ability to continuously provide good content is essential. The 'newness' of content is not just about creating new songs but also about covering diverse and high-quality content from online to offline and from film and television scenes to gaming scenarios.

Taking offline scenarios as an example, with the booming offline performance market, offline has become a new growth area for the music market, amplifying the charm of music infinitely. Data released by the China Association of Performing Arts shows that national box office revenue from commercial performances reached 20.81 billion yuan in the third quarter of this year, a significant year-on-year increase of 41.1%.

Tencent Music is also fueling the fire of offline performances. For example, this quarter, Tencent Music created a concert for singer-songwriter Yu Jiayun and also hosted the 'Second Zebra Music Festival,' featuring headline musicians such as Xue Zhixian, Chen Chusheng, Zhang Yuan, Zhao Lei, Suede, and Tencent Musician Liu Shuang, attracting 65,000 attendees.

Shifting focus back online, in the third quarter, Tencent Music renewed its contracts with Yuehua Entertainment Group and Elephant Music Group and reached a strategic cooperation with Galaxy Corporation, further strengthening its advantages in Korean pop music content.

In addition to cooperating with record companies and consolidating the supply of top music content, Tencent Music has also continued to increase its investment in content production: in the third quarter of this year, the song 'I Want to Be the Wind' by the Mr. Rabbit band became a hit of the summer, popularized by the most popular film of the summer vacation, 'Doll Catcher.'

The OSTs of films and TV dramas have always been a treasure trove of popular songs. TME Audio+Video participated in the co-creation and production of high-quality film and TV soundtracks for over ten popular films and TV dramas, including 'The Tale of Roses,' 'Celebration of the Remainder Years 2,' 'With Phoenix,' 'Order of Flowers,' 'Decryption,' and 'The Road of Fire,' creating a batch of highly singable works.

Young people today are willing to pay for 'emotional consumption,' with offline music performances, TV dramas, films, games, and more being the best venues for such consumption. Music, as the best carrier that can connect many forms of content, continues to unleash new charm with 1+1>2 in different scenarios.

Another 'newness' that cannot be ignored comes from the new experiences brought about by technological innovation. After all, in an era of steady and long-term development, the competition is about how to provide users with a more refined experience in segmented scenarios.

Users with high audio-visual requirements are surely familiar with Dolby and DTS sound effects, which provide higher music details. The September update of QQ Music officially made it the first music streaming platform in China to offer a comprehensive range of high-quality audio and sound effects, including DTS sound effects, Dolby Atmos, and Supreme Sound Quality. These excellent audio-visual effects, enhanced by such technology, can provide users with an 'immersive' experience.

Tencent Music is also pursuing the continuous expansion of the boundaries of 'listening to music.' In addition to headphones and speakers, the in-car scenario is also a common immersive listening scenario in daily life.

In this quarter, Tencent Music deepened cooperation with Xiaomi, Li Auto, NIO, and others, adding Viper series audio and sound effects to the in-car terminals; it also officially announced a strategic cooperation with Dongfeng Motor's R&D Institute to jointly create a new intelligent cockpit music experience – no matter where you drive, the best music experience will always accompany you.

By continuously tapping into user value and always providing users with a little more novelty, only by adhering to this path can the platform enjoy a better ecological cycle and room for growth – this is Tencent Music's approach in an era of steady and long-term development. Tencent Music's Q3 Financial Report: A Steady Bliss