Net profits at Tencent Music Entertainment, China's largest digital music company, increased by 36% to $735 million (RMB5.22 billion) in 2023, despite a 2% decline in revenues to $3.91 billion. The fourth quarter saw profits of $198 million (RMB1.41 billion) from revenues down 7% at $971 million (RMB6.89 billion). This performance reflects a strategic shift towards converting free users into paying subscribers, resulting in a 39% growth in music streaming subscription revenues to $1.70 billion for the full year.
The number of paying subscribers grew by 21% to 107 million, with an average revenue per subscriber of RMB10.7 or $1.49, a 20% increase. Although monthly active users for online music decreased from 601 million to 576 million, Tencent Music still reaches over 40% of China's population monthly. The success in streaming services offset challenges in the 'social entertainment' segment, where monthly active users dropped by 28% to 104 million.
