Paid subscribers for the company's online music service grew
by 41 percent to 66.2 million, thanks to investments in long-form audio and a
refreshed music library expanded by licensing deals with Universal Music Group,
Sony Music, and other labels.
Tencent Music shares were up 1.2 percent in extended
trading. They have lost half of their market value this year due to Beijing's
crackdown on its tech giants and a ruling that barred the company's parent,
Tencent, from exclusive music copyright agreements.
The company said it expected the decision to have some
impact on its operations, without specifying a figure.
Losing exclusive rights means Tencent Music will likely have
to redouble efforts to build a more interactive community while facing a
challenge from ByteDance that is using Douyin - the Chinese version of TikTok -
to promote music backed by sophisticated algorithms.
Tencent Music's social entertainment services business,
which includes karaoke platforms where users can live stream concerts, posted a
7.4 percent rise in revenue to CNY 5.06 billion in the quarter and accounted
for most of its revenue.
Total revenue rose by 15.5 percent to CNY 8.01 billion, but
missed a Refinitiv IBES estimate of CNY 8.13 billion.
The company earned CNY 0.66 per American depository share on
an adjusted basis, more than estimates of CNY 0.62