Tencent Music’s quarterly revenue rises but warns of decline ahead By Reuters

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<span>© Reuters. FILE PHOTO: The logo of China’s Tencent Music Entertainment Group is seen next to an earphone in this illustration picture taken March 22, 2021. REUTERS/Florence Lo/Illustration/File Photo</span><br />
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<p>By Josh Ye and Samrhitha A</p>
<p>(Reuters) -China’s <span itemscope="" itemtype="http://schema.org/Corporation"><span itemprop="name"> Tencent Music Entertainment Group </span></span> (NYSE:) said on Tuesday second-quarter revenue rose 5.5% year-on-year, driven by a rise in user subscriptions, but warned that future revenue will shrink as tighter live-streaming controls come into effect.</p>
<p>Total revenue of the Spotify-like music streaming company controlled by Chinese tech giant Tencent Holdings (OTC:) Ltd stood at 7.29 billion yuan ($1.00 billion) in the quarter to June 30, in line with Wall Street estimates, according to Refinitiv data.</p>
<p>The number of paying users of its online music streaming service rose more than 20% to 100 million, a milestone for the company. </p>
<p>However the group said in a call with analysts that it has implemented risk control measures across its live-streaming services which will result in a “low to mid-single-digit per cent decrease” for its total revenue this year from last year. </p>
<p>Tencent Music’s shares gained about 1% in New York when the market opened on Tuesday. </p>
<p>Tony Yip, the company’s chief strategy officer, said Tencent Music is making adjustments to its live-streaming business in order to “better control potential risks the platform may face in the future”, without elaborating on the type of risks. </p>
<p>He added that the company is “adjusting certain live streaming functions and adopting more stringent compliant procedures”, describing them as necessary for its platform’s “healthy development in the long run”.</p>
<p>He said total revenues for the company will experience “a low to mid-teens percent decrease” in the coming quarter from the same period last year. </p>
<p>But the company said profit will continue to grow this year. In the second quarter, net profit attributable to equity holders rose to 1.30 billion yuan from 856 million yuan a year earlier.</p>
<p>($1 = 7.2850 renminbi)</p>
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