Tencent Music Entertainment (TME), China’s largest operator of music streaming services, has recorded a double-digit jump in revenue driven by rapid growth in its music services division.
TME’s revenue from online music services grew 27.2% YoY to RMB 6.97 billion (USD $979 million) in the third quarter, the company reported on Wednesday (November 12).
Of that, RMB 4.50 billion ($632 million) came from music subscriptions, up 17.2% YoY.
TME attributed the growth in music revenues to improved average revenue per paying user (ARPPU) – which grew 10.2% YoY to RMB 11.9 – and to continued expansion of its Super-VIP (SVIP) tier, a “super-premium” subscription tier that costs five times as much as a premium subscription.
According to TME, this monthly ARPPU growth was primarily due to the expansion of its SVIP membership program, as it “continued to expand SVIP membership privileges for [TME] users”.
TME didn’t update subscriber numbers for its Super-VIP tier from the 15 million it reported at the end of Q2, but said SVIP numbers “further improved thanks to superior streaming experiences and enriching artist-related benefits.”
The number of paying music users grew 5.6% YoY to 125.7 million, while monthly active users (MAUs) fell 4.3% YoY to 551 million.
The company stressed that it continues to diversify its music subscription tiers, via the introduction of its paid, ad-supported tier between its freemium and premium tiers.
That, along with “innovative ad formats,” propelled year-on-year growth in ad revenue, TME said, though the company didn’t break out ad revenues in the earnings statement.
Tencent noted that its paying ratio – the number of paying subscribers as a percentage of MAUs – has grown along with overall user growth, and has now reached 22.5%.
That leaves TME well behind Spotify, which had a paying ratio of 39.4% in Q3, with 281 million paying users and 713 million MAUs.
TME attributed some of the growth in music services users to its integration of fan platform bubble, a product of DearU, a fan platform operator whose key investor is South Korean K-pop company SM Entertainment. TME said it had onboarded 15 new artists to bubble during the quarter.
“A creative approach to personalized offerings and experiences, supported by deepening user insights, continued to strengthen user loyalty, leading to further increases in both SVIP penetration and ARPPU,” TME CEO Ross Liang said.
“Moving forward, we will further sharpen our core strengths, enhance platform efficiency, and capture emerging opportunities as we continue to drive music creation and consumption.”
The strength in TME’s music services drove overall revenue up 20.6% YoY to RMB 8.46 billion ($1.19 billion).
The numbers were slightly dragged down by a 2.7% YoY decline in TME’s “social entertainment services and other” category, to RMB 1.49 billion ($210 million).
“A creative approach to personalized offerings and experiences, supported by deepening user insights, continued to strengthen user loyalty.”
Ross Liang, Tencent Music Entertainment
As with its rival Netease, TME has seen years of decline in social entertainment revenues due to the Chinese government’s crackdown on online gambling. TME has indicated previously it is pivoting to music services to offset the decline.
The company reported a 30.6% YoY jump in net profit to RMB 2.15 billion ($302 million). Earnings per American Depositary Share amounted to RMB 1.38 ($0.19), up from RMB 1.01 in the same quarter of 2024.
“Our ongoing innovations in content enrichment, services expansion to include more live experiences, continued to fuel consistent subscription revenue growth while boosting momentum in non-subscription services, especially in concerts and artist merchandise,” TME Executive Chairman Cussion Pang said.
“Backed by our strong financial position and operational excellence, we are poised to further broaden our music services and create greater value for the entire music industry.”
“Backed by our strong financial position and operational excellence, we are poised to further broaden our music services and create greater value for the entire music industry.”
Cussion Pang, Tencent Music Entertainment
TME operates music streaming platforms QQ Music, Kugou Music and Kuwo Music, and karaoke platform WeSing, as well as a number of other businesses including long-form audio streaming platform Lazy Audio and live events producer TME Live.
RMB to USD currency conversions were provided by TME, based on the exchange rate as of September 30, 2025, per Federal Reserve data.Music Business Worldwide
