Tencent Music’s quarterly revenue rises as more Chinese users pay for music

(Reuters) – China’s Tencent Music Entertainment Group (NYSE:) said on Tuesday second-quarter revenue rose 5.5% from a year ago, driven by growth in paying users on its Spotify-like music streaming platform and a recovery in the advertising market.

After months of conservative spending companies are starting to see a rebound on signs of cooling inflation and improving consumer sentiment through the rest of the year.

The company has also been ramping up its original content slate to attract more users and stave off competition from the likes of NetEase-owned Cloud Music and ByteDance’s short-video sharing platform Douyin.

Total revenue of the company, controlled by Chinese tech giant Tencent Holdings (OTC:) Ltd, stood at 7.29 billion yuan ($1.00 billion) in the quarter ended June 30, in line with Wall Street estimates, according to Refinitiv data.

Paying users at its online music streaming service rose 20.2% to 99.4 million in the quarter.

Subscriber growth also accelerated thanks to promotional discounts and users’ willingness to pay for premium features such as sound quality.

Net profit attributable to equity holders was 1.30 billion yuan, compared with 856 million yuan in the same period last year.

($1 = 7.2850 renminbi)