Tencent Music Entertainment logo is seen displayed on a smartphone.
Mostly unseen in the United States, music streaming company Tencent Music Entertainment continued to prove it’s a formidable force by improving revenues 34% to $3.65 billion in 2019. Net income jumped 126.7% to $664 million. Tencent Music, a collection of four streaming platforms in China and South Korea, generates far more revenue selling virtual goods than subscriptions to music. It’s a business model with enviable margins: Tencent Music’s gross margin was $1.25 billion, or 34.1% of revenue -- far better than the 25-30% seen at other streaming companies.
Tencent Music served 644 million listeners at the end of 2019, second only to YouTube and 373 million more than Spotify. Between the four platforms -- QQ Music, Kugou, Kuwo and WeSing -- end-of-year paying subscribers numbered 39.9 million, a 47.8% increase from 2018, but well behind Spotify’s 124 million and Apple Music’s 60 million.