There’s been a lot of talk about ‘super premium’ streaming subscription tiers of late… not least the fact that Spotify is yet to confirm hard details (or a launch date) for its mooted, higher-priced ‘Music Pro’ offering.
Meanwhile, in China, an equivalent product — Tencent Music’s ‘Super VIP’ tier — is doing very nicely.
Tencent Music Entertainment (TME) confirmed its Q2 results today (August 12), with a strong performance from its core music business.
TME’s music subscription revenues reached RMB 4.38 billion (USD $611 million) in the quarter ending June 30. That represented 17.1% YoY growth – as the firm’s SVIP tier continued to drive both subscriber numbers and monetization higher.
TME, which operates QQ Music, Kugou Music, Kuwo Music and WeSing platforms, reported that its total online music services revenue grew 26.4% YoY to RMB 6.85 billion (USD $957 million) in the quarter.
(Music subscriptions accounted for around 64% of this total music revenue; the rest was made up from advertising services, artist-related merchandise, and ‘offline’ aka live performances).
Here’s a particularly interesting set of stats for TME watchers in the ‘west’:
- The firm’s total music monthly active users (MAUs) actually fell YoY in Q2, down 3.2% YoY to 553 million;
- Yet TME’s total number of paying music users grew 6.3% YoY to 124.4 million;
- Meanwhile, monthly music ARPPU (average revenue from each paying user) increased 9.3% YoY to RMB 11.7 (around USD $1.63).
That rise in ARPPU was driven by the expansion of TME’s higher-priced SVIP membership program, which recently surpassed 15 million subscribers, according to TME CEO Ross Liang.
This represented continued strong growth from the 10 million SVIP subscribers the company reported in Q3 2024.
This also means that around 12% of TME’s total 124.4 million streaming music subscribers are now on the SVIP tier, compared to 8% as recently as September 2024.
TME SVIP subscribers pay approximately RMB 40 (USD $5.58) per month compared to the standard RMB 8 (USD $1.12) subscription, meaning these premium users generate five times the revenue of regular subscribers.
What do SVIP members actually get?
Premium sound quality “remains the most popular SVIP membership benefit”, said TME, with Kugou Music showcasing VIPER HiFi sound quality and One-Click Audio Enhancement 2.0 during the quarter.
“Artist-centric privileges have become increasingly effective at boosting SVIP adoptions,” added TME.
In Q2, these privileges included: (i) exclusive/timed-exclusive digital albums with standout releases like Hold Me Close by A-Lin & JJ Lin and Pleasure by Jolin Cai; (ii) priority access to concert tickets for in-demand events by G-DRAGON and BLACKPINK; and (iii) a collectible ‘star card’ series in collaboration with artists such as JC-T, Silence Wang and aespa.
TME CEO Ross Liang emphasized the music-centric strategy in a Q2 earnings press release: “Our focus on product innovation to deliver immersive user experiences has driven solid growth in our online music business. This is reflected in the continued expansion of both our subscriber base and ARPPU, along with deeper user engagement.
“We are especially pleased to see our SVIP subscribers recently surpass 15 million, a new milestone reflecting the deep trust and loyalty of our users. We see great potential in the music entertainment space and remain committed to investing in new initiatives that create lasting value and impact to music creators and consumers.”
TME Executive Chairman Cussion Pang noted: “While our music subscription business remained a core growth driver, our expanding suite of music-related services— including advertising, concerts, and artist merchandise—showed impressive momentum.
“As we continue to scale our platform, we are focused on building a vibrant, one-stop music service destination that empowers content creators and reshapes connections with music lovers in meaningful ways.
Other Q2 highlights at TME
Tencent Music strengthened its music content offerings through new partnerships in Q2, establishing cooperation with The Black Label and H MUSIC for the first time to expand K-pop content.
The company says it also collaborated with Chinese star Wang Feng and partnered with SM Entertainment to release NCT Chenle’s Chinese EP Lucid, supported by extensive promotions.
TME’s live music business performed well, with G-Dragon’s concert tour in Macau drawing 36,000 fans and selling out merchandise.
In the first half of 2025, says TME, it facilitated over 300 offline performance opportunities for nearly 100 artists and groups from its Tencent Musician Platform, featuring proprietary IPs CITY LIVE and BUFF LIVE.
(Tencent’s strong involvement in the local concert market may be one reason why Live Nation‘s Michael Rapino stated last week that LN saw great opportunity all around the world for expansion… outside of China.)
TME said its cross-platform promotions propelled several works to trending hits, including Xiang Sisi’s Why Not Wait for the Wind, which amassed over 20 million streams and topped multiple music charts.
TME’s overall and non-music business
TME’s total company revenues reached RMB 8.44 billion (USD $1.18 billion) in Q2, up 17.9% YoY.
The firm’s music operations accounted for 81% of total quarterly revenues, up from 76% in the same period last year, highlighting the strategic shift toward music-focused operations.
The rest of TME’s revenues come from its ‘social entertainment and other’ business division. This division, covering legacy karaoke and live streaming services, saw revenue decline year over year.
Company-wide (music + ‘social entertainment’) gross margin expanded to 44.4%, reflecting the shift toward higher-margin music subscription revenues, particularly from SVIP memberships.
The strategic focus on higher-margin music services contributed to overall company profitability: TME said that net profit attributable to equity holders reached RMB 2.41 billion (USD $336 million) in Q2, representing 43.2% year-over-year growth.
Note: RMB to USD conversion in this report carried out at exchange rate as of June 30, 2025, as provided by TME: RMB 7.1636 to USD $1.00.
Music Business Worldwide
