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Tencent Music misses quarterly revenue estimates as social entertainment unit drags

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Tencent Music misses quarterly revenue estimates as social entertainment unit drags

(Reuters) -Tencent Music Entertainment missed estimates for quarterly revenue on Tuesday, as Beijing’s crackdown on online gambling continues to impact its social entertainment segment.

U.S.-listed shares of the company fell 5.6% in premarket trading.

The China-based company had removed certain live-streaming features in August last year to comply with anti-gambling regulations.

Revenue from the company’s social entertainment services business, which includes karaoke app WeSing and live concert platform Kuwo Music, fell 23.9% in the third quarter.

But the impact was largely countered by a 20.4% rise in revenue at its online music unit, after paying users increased 15.5% to 119 million.

Tencent Music’s premium Super VIP (SVIP) membership, which combines long-form audio content, online karaoke services and high-quality sound, has gained significant traction among users.

The company’s revenue rose 6.8% over the year earlier to 7.02 billion yuan ($970.23 million) in the third quarter, but narrowly missed analysts’ average estimate of 7.04 billion yuan, according to data compiled by LSEG.

($1 = 7.2354 Chinese yuan renminbi)

(Reporting by Harshita Mary Varghese in Bengaluru and Yelin Mo in Beijing; Editing by Shilpi Majumdar)

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