TENCENT MUSIC USES ‘TIPPING’ TO RACK UP REVENUES

Chinese tech conglomerate Tencent currently runs a profitable music streaming business. The vast majority of streaming services in Western markets, however, are still millions of dollars in the red.

But Tencent Music’s financial success points to a vastly different growth narrative, which is arguably separate from the recorded-music sector: the vast majority of the company’s revenues don’t actually come from paid streaming subscriptions.

Instead, its growing profit margins are riding the wave of China’s exploding media micropayment economy – which allows users to “tip” their favorite bloggers, artists, personalities and live-streamers natively through websites or mobile apps.

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Chinese tech conglomerate Tencent currently runs a profitable music streaming business. The vast majority of streaming services in Western markets, however, are still millions of dollars in the red.