Tencent Music’s earnings meet expectations, but costs hit discordant note
Tencent Music has been profitable at an operating level for the past two years, whereas Spotify only posted its first quarterly operating profit in its history in the fourth quarter
Beijing/Hong Kong/Bengaluru — Chinese streaming firm Tencent Music Entertainment delivered its first earnings report as a public company, meeting market expectations but exposing soaring licence and content production costs, which pulled its shares down 6%. The US-listed company’s shares have gained about 43% since debuting in December, but its results published on Tuesday highlight the need for more time until Chinese users fully adapt to the relatively new pay-to-listen approach. Unlike western peers such as Spotify Technology, Tencent Music generates only a fraction of revenue from music subscription packages, and instead relies heavily on services popular in China such as online karaoke and live streaming. Tencent Music has been profitable at an operating level for the past two years, whereas Spotify posted its first quarterly operating profit in its history only in the fourth quarter. "To fuel our growth for the years to come, we are firmly committed to continue investing in pr...
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