Tencent Music Entertainment Group (TME), China’s prominent online music and audio platform, has demonstrated robust financial performance in its third quarter, reporting a significant 27% year-over-year revenue growth. This impressive surge was primarily fueled by strong increases in music subscriptions and a thriving live events segment, alongside contributions from advertising services and artist merchandise. The results underscore TME’s strategic success in expanding its ecosystem and monetizing its extensive user base.

Tencent Music Entertainment Reports 27% Revenue Growth in Q3, Driven by Subscriptions and Live Events

Strong Financial Performance in Q3

For the quarter ending September 30, TME’s online music service revenues climbed to RMB 6.97 billion (approximately $979 million), marking a substantial 27.2% increase compared to the same period last year. This growth highlights the company’s ability to effectively leverage its diverse revenue streams within the competitive digital music landscape. Beyond top-line growth, TME also reported a healthy increase in profitability, with total operating profit rising by 26.4% year-over-year to $381 million.

Subscription Growth: A Key Driver

A significant contributor to TME’s stellar Q3 performance was the robust growth in its music subscription revenues. These revenues saw a 17.2% increase, reaching $632 million. The expansion of the company’s SVIP membership program played a crucial role in this growth, indicating a successful strategy in converting free-tier users to paying subscribers and upselling existing members to premium offerings. The effectiveness of these premium tiers is further reflected in the rise of monthly average revenue per paying user (ARPPPU), which grew from $1.5 in the prior year period to $1.6.

Expanding Content and User Engagement

TME continued to enhance its content library and diversify its offerings, fostering deeper user engagement. The company forged new partnerships with music labels in South Korea and Japan, significantly expanding its music catalog. Collaborations with game developers, such as Tencent Games, further broadened its content offerings. A notable example is the co-production of the “Honor of Kings 10th-anniversary theme song ‘Atlas of Tomorrow,'” performed by JJ Lin, which garnered over 600 million social media mentions within two weeks of its release.

To attract a wider audience and increase daily usage, TME introduced a new ad-supported membership tier. This initiative successfully engaged free-tier listeners and contributed to an increase in overall daily usage time. Artist-driven content also proved to be a strong draw, with offerings like digital albums and collectible NFC cards, such as Eason Chan’s “Fear and Dreams,” playing a role in driving SVIP subscription growth.

Live Events and International Expansion

The third quarter also saw TME solidify its position in the live music sector. The company successfully hosted 14 sold-out G-Dragon concerts across Sydney, Melbourne, and Kuala Lumpur, attracting over 150,000 attendees. This demonstrates TME’s growing influence in the international live music market. Furthermore, the launch of the TMElive International Music Awards, featuring 22 artists and groups from China and other Asian countries, was a resounding success, drawing over 20,000 attendees across two days.

Domestically, TME’s annual TMEA 2025 event brought together 35 artists and groups, engaging over 10,000 attendees. The company also extended its support to concert tours for various artists, including Fiona Sit, Tia Ray, and Gai, some of which saw successful transitions from arena-level to stadium-level venues, showcasing TME’s comprehensive support for artists and its ability to scale live music experiences.

Conclusion

Tencent Music Entertainment’s Q3 performance highlights a well-executed strategy focused on diversified revenue streams, content expansion, and a robust engagement model. The substantial growth driven by music subscriptions and the successful execution of live events, both domestically and internationally, positions TME for continued leadership in the digital music and entertainment industry. The company’s ability to innovate with new membership tiers and artist collaborations, alongside expanding its global footprint in live music, underscores its dynamic approach to sustained growth.