China’s largest streaming service, Tencent, goes public on NYSE
Tencent Music Entertainment has officially gone public in the United States. China’s leading music-streaming company operates three of China’s largest digital services: QQ Music, Kuwo and KuGou. They also have their hands on a karaoke app, WeSing. In total, the company has amassed more than 800 million monthly active users.
Total revenue of the company in 2017 was reportedly $1.66 billion, and 2018 plans to see even bigger returns. The IPO values the company around $30 billion, according to expert analysts, which is comparable to Spotify‘s $29.5 billion evaluation when the Swedish streaming giant went public earlier this year. Spotify is now currently valued at $32 billion.
There’s a noticeable difference between the two competing, yet complementary, streaming companies. While Spotify, who owns nine percent of Tencent from a share swap earlier in 2018, has been losing money year after year because of their cheap product and large royalty payouts, Tencent has been largely profitable for the last two years. A reasoning for this is Tencent Holdings diverse portfolio of other digital businesses such as a gaming platform, social network and the popular messaging app, WeChat. Spotify simply focuses on music streaming.
QQ Music has multiple entertainment experience offering including listening subscriptions, concert tickets and exclusive song downloads. Online music services accounted for only 29.6 percent of TME’s revenues in the first half of 2018. Other social entertainment services such as in-car audio, event ticketing, online karaoke and sales of headphones and karaoke microphones, made up the other 70.4 percent. These numbers will be closely watched by investors interested in the music space.
H/T: Rolling Stone