Tencent Music (Minutes): Compared to podcasts, more emphasis is placed on long audio.
Below is the earnings call $Tencent Music(TME.US) Minutes for FY25 Q1. For earnings analysis, please refer to《Tencent Music: A "New" Growth Cycle—Mediocrity or Steady Happiness?》
1. Key Earnings Highlights
2. Detailed Earnings Call Content
2.1 Core Management Remarks
1. Content Ecosystem & User Preferences: Korean, English, and Japanese tracks gained popularity. Thus, the company renewed partnerships with Korea's Starship and YG, collaborated with G-DRAGON, expanded ties with Japanese ACG record labels, and launched merch collaborations (e.g., G-DRAGON’s official lightsticks and China-exclusive perks). BABYMONSTER’s pop-up exhibitions debuted in mainland China.
2. User Engagement & Monetization: Hi-fi audio remains a key SVIP selling point (15% penetration). Discounts, exclusive perks, and priority access to artist merch/concert tickets effectively boosted SVIP conversions.
3. R&D & Innovation: TME leverages AI for engagement—e.g., interactive comments and DeepSeek ERM for content quality/recommendation accuracy.
2.2 Q&A
Q: 2025 revenue/profit growth outlook?
A: Strong Q1 fuels confidence. Full-year growth to accelerate YoY with margin expansion. Music subscriptions remain the healthy core; SVIP perks (e.g., merch, non-paid audio, concerts) will lift ARPPU (Revenue/Paying Users). 2025 growth hinges on subscriber gains + ARPPU growth. Ads and artist collaborations will drive non-subscription revenue.
Q: Podcast growth in China? Long-audio metrics?
A: Podcasts (akin to solo/multi-host livestreams) lag vs. global peers (e.g., US) but show niche growth in China. Focus remains on long-audio (audiobooks, web novels, kids’ content), which complements subscriptions and boosts SVIP.
Q: SVIP retention/ARPU drivers?
A: SVIP adoption grows among labels/artists. Penetration/ARPPU trends are strong. 2025 priorities: enhanced perks, artist partnerships, and product polish.
Q: ARPPU +7.5% YoY—SVIP/promo impact?
A: No breakdowns. Reduced Q1 discounts aided ARPPU. SVIP will increasingly drive ARPPU organically.
Q: Monetizing non-paying users beyond ads?
A: Priority is converting them to subs. Incentivized ads and digital merch (e.g., albums, downloads) are secondary.
Q: Gross margin drivers? OpEx plans?
A: SVIP/sub growth + ROC cost control. 2025 opEx to rise slower than revenue.
Q: Southeast Asia strategy?
A: Platform/content investments continue. Offline concerts are a focus.
Q: Ad/offline biz outlook?
A: Incentivized ads thrive. Tencent’s ad tech boosts yields. Concerts will target SVIP perks.
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