Spotify’s latest quarterly results are due out in a few hours, but Daniel Ek – plans to launch “ultra-premium packages” on its own platform – may be slightly distracted by some revealing statistics just coming out of China.
Tencent Music Entertainment Financial performance and user metrics for the third quarter of 2024 (the three months ended September 30) have been released.
Although The total number of monthly active users of online music decreased 3% annual increase arrive 576 millionTME reported on Tuesday (November 12) that the number of users pay Increase access to its services Annual increase of 15.5% arrive 119 million (see below).
TME – China’s largest music service provider and owner QQ Music, Kugou, Those ones, and we sing Platform – Add 2 million The number of online music subscribers in the third quarter compared to the previous quarter (Q2 2024).
But perhaps even more interesting is TME’s turn in season three of converting paying subscribers to “Super VIP’ subscriber.
The company confirmed on Tuesday that its calculations had exceeded 10 million SVIP subscribers as of year end September 2024.
in other words, 8.4% 1% of TME’s total paying users subscribe to TME’s “Super VIP” level, which costs five times more than a regular subscription.
We know that launching more expensive “Super VIP” Spotify itself is busy planning the launch of tiers.
The company has yet to confirm what additional gadgets this tier might offer users. But in July, talking to analysts, Daniel Ek The suggestion says that this will suit “primarily huge music lovers who are looking for more flexibility in how they use Spotify and the music features that are available on Spotify.”
Ek also proposed a price: “Like $5 Higher than the current premium level…probably approx. $17 or $18 [per month] price point”.
Tencent Music As you’d expect in China, music subscriber monthly ARPU (average revenue per user) is significantly lower than the numbers quoted by Ek.
A standard Tencent Music app music subscription costs approximately $1; “Super VIP” subscription is closer $5.
TME monthly user ARPU growth is partly due to the growth of “Super VIP” Annual increase of 4.9% to RMB 10.8 (approx. $1.50) in the third quarter of 2024.
CEO of Tencent Microelectronics Liang Ross The company explained on Tuesday “Strong music subscription performance,” coupled with “better-than-expected net subscriber growth and expanding ARPPU,” highlighted TME’s “ [its] “Growth in a balanced manner will be important to drive expansion of the paying user base in the coming years,” he added.
But TME’s chief executive singled out what he called “rich and differentiated user privileges,” the segmentation of the paying user base, as an important growth driver for the company’s music streaming business.
according to Ross Liang, TME “More value propositions for premium members[ve] He added that it “creates greater loyalty on our platform” which has seen widespread acceptance among its user base.
The company also cited “attractive membership privileges, optimized user operations and effective promotions, as well as expanded [its] SVIP Membership Program” as the reason for the growth of its paying user base and monthly ARPPU.
Major players in the global music industry will be paying close attention to the performance of TME’s “Super-VIP” subscription service.
At Universal Music Group’s Capital Markets Day in September, UMG executive vice president and chief digital officer Michael Nash called TME’s super VIP level “another exciting example of how product innovation can significantly increase customer value.”
“We expect most streaming platforms to deploy ‘super premium’ tiers, which will enhance the subscriber experience, bring fans closer to their favorite artists, and significantly increase subscription revenue,” he added.
At the end of October, during Universal Music Group’s third quarter earnings call, UMG Chairman and CEO Sir Lucian Grainge said that a key factor in the development of the streaming business “will be improving customer acquisition strategies to drive the transition from free to paid. Greater conversion, and then move from paying to the super fan class.”
“By offering rich and differentiated user privileges, our value proposition for more premium members has been widely accepted, thereby fostering greater loyalty on our platform.”
Ross Liang, TME
According to TME, the two main growth drivers for the adoption of SVIP levels in the third quarter are premium audio quality and “rich long-form audio products.”
QQ music and other functions Premium sound effectsThe company said DTS sound quality and Kugou Music’s Viper Ultra Sound “help enhance” the SVIP membership experience.
“We have also expanded the privileges of the Viper series to in-car use by strengthening cooperation with Xiaomi, Li Auto and NIO,” added TME Tuesday.
The company also said it works with artists and labels to offer Super VIP Members’ “additional privileges,” it said, “enhanced[es] Conversion Rates and Loyalty”.
Other perks for SVIP subscribers include what TME calls “free access to an extensive digital album collection” as well as “exclusive concerts and fan engagement events” such as pre-sale concert tickets gem, Mariah Careyand Aunt Lei during this season.
In Tencent Music Entertainment’s latest results, on the financial front, the company reported, rActivities of online music services Increase Annual growth of 20.4% arrive 5.48 billion yuan ($781 million) from 4.55 billion yuan Same period in 2023 (see above).
TME said the growth was “driven by solid growth in music subscription revenue, complemented by growth in advertising services revenue”.
TME music subscription revenue specifically reaches 3.84 billion yuan ($547 million) in Q3, represents Annual growth of 20.3% growth compared to 3.19 billion yuan Same period in 2023.
“Our steady growth in music users and diversified music services continue to drive overall growth and profitability.”
Ponkusen, TME
TME Executive Chairman Peter Pang added: “Our commitment to high-quality growth is reflected in another solid quarterly performance.
“The steady growth of our music users and diversified music services continue to drive overall growth and profitability.
“We are encouraged by the growing synergies between our platform and a well-established content ecosystem, which have become a significant enabler in enabling us to capture new opportunities for long-term sustainable growth.”global music business
