Why is Tencent Music Entertainment Unique in The Global Music Industry?

Global Music Industry

Tencent Music Entertainment Group is about to go public in the US, and a ceremonial ceremony for China’s online music industry from user cultivation to the business model, is increasingly diverse and sound, and China’s digital music payment is growing rapidly. At the same time, it also means that Tencent Music Entertainment, the leader of the Chinese music industry, has officially entered the international arena. Regardless of business model, ecological construction or user scale, Tencent Music Entertainment is unique in China and the global music market.

The largest online music entertainment platform to build a unique ecosystem

According to the prospectus, Tencent Music Entertainment is a “one-stop” music entertainment platform with more than 800 million monthly active users and the largest online music entertainment platform in China.

Based on rich music content, Tencent Music Entertainment continues to extend the consumption scene around the six core services of “discover, listen, sing, watch, perform, and socialize”, redefining the value of music, and beyond the traditional Internet music model, through its series. The product and service matrix builds a new ecosystem of music and social entertainment.

In terms of content, TME has cooperated with more than 200 companies to provide users with over 20 million music libraries. The partners include Sony’s three major record companies Sony Music, Universal Music, and Warner Music, as well as Chinese giants in China’s domestic market. Group, etc. At the same time, through the original content of the Tencent musicians, content self-made, etc., continue to enrich vertical content.

In the layout of Tencent Music Entertainment, experience music is more than just listening to songs using QQ music, cool dog music or cool music. For example, the same song, QQ music users buy through digital albums, support their favorite singers; sing karaoke in the national K songs, and then share the works to friends on the social network, you can reach an interaction.

Tencent music is not just music streaming, but also provides music-centered social entertainment services. This composite business composition is also the advantage of Tencent Music Entertainment. Tencent Music Entertainment has broken through the traditional business model of international streaming media, and unlike Spotify and Apple Music, which are working hard to expand the user market; Tencent Music Entertainment has entered the exploration of mature commercial realization based on huge user traffic.

Paid to explore changing industries and create more business possibilities

Tencent Music Entertainment’s four major platforms QQ music, cool dog music, cool music, and national K songs, ranked in the top four online music APP market, Tencent Music Entertainment is also the first company in China to successfully explore the music payment model, to some extent change the development trend of China’s online music industry.

Compared to the international streaming music market, which only has two profit models: advertising and paid a subscription, Tencent Music Entertainment has formed a multi-innovative business model around subscription payment, digital albums, virtual gifts, and value-added members. These business models are closely integrated with products and services to optimize the user experience and meet the needs of users while providing more commercial realization possibilities for the entire industry.

At the same time, Tencent Music Entertainment began to pay more attention to the value of music itself in the process of commercialization of music, which also means that the Chinese music industry is using the Internet to reconstruct business models. As a ubiquitous entertainment need, music coverage is more abundant. How to connect to the attention economy and multiple consumption scenarios through the music-centered pan-entertainment industry becomes the key to the musical imagination, and thus the possibility of infinite realization. Therefore, Tencent Music Entertainment has also embarked on a completely different path from similar products in the innovation of the music industry business model.

Fast and continuous profitability, unlimited music and social entertainment space

Tencent Music Entertainment is not only profitable but also achieves continuous profit growth, making it the only technology giant to be listed and whose account is not deficit (Bloomberg Review). What’s more interesting is that unlike Spotify, it can keep growing while growing fast – pre-tax profit in the first half of 2018 has quadrupled, operating cash flow has increased by 6%, and total net investment has fallen by nearly three-thirds.

Socialization is an extremely important part of Tencent’s music entertainment business model because social communication can open up the connection between users, meet the user’s social music entertainment needs, and enhance user activity and stickiness. In the era of emerging fan entertainment, in order to meet the needs of fans, Tencent Music Entertainment tries to create a panoramic, three-dimensional, multi-channel interactive scene for fans through its products. It is foreseeable that in the future, Tencent Music Entertainment will achieve more “commercial entertainment” through more vertical fan dialogues, thus gaining more commercial possibilities.


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