Moving beyond an era focused solely on scale expansion, Tencent Music Entertainment Group (TME) is now leveraging its extensive copyright library to tap into a more lucrative revenue stream.

On March 17, TME released its financial results for the fourth quarter and the full year. Against the backdrop of plateauing user growth in the broader entertainment industry, the report demonstrated significant resilience. For the full year, total revenue reached 32.9 billion yuan, a 15.8% year-over-year increase. Adjusted net profit was 9.92 billion yuan, rising 22% compared to the previous year. In the fourth quarter alone, total revenue was 8.64 billion yuan, up 15.9% year-over-year.

This robust growth in both revenue and profit was primarily driven by the continued high-quality expansion of the online music service business, which is undergoing a qualitative change in its commercialization depth.

The financial report indicated that full-year online music service revenue grew 22.9% to 26.73 billion yuan. Growth in the online music non-subscription segment was particularly strong, increasing 39.2% for the full year to 9.07 billion yuan.

A closer look at core metrics reveals a typical profile of China's maturing internet sector: while the absolute size of the user base is contracting, the value per customer is soaring.

In the fourth quarter, the Monthly Active Users (MAU) for TME's online music services were 528 million, a 5% decrease from 556 million in the same period of 2024. The ongoing diversion of user attention by short-video platforms remains a persistent challenge for online music services.

However, despite the decline in MAU, the number of online music paying users increased against the trend, reaching 127.4 million, a 5.3% year-over-year growth. The Average Revenue Per Paying User (ARPPU) also rose, from 11.1 yuan in Q4 2024 to 11.9 yuan in Q4 2025, an increase of 7.2%.

This simultaneous growth in user value and paying user numbers points to the strategy TME has adopted in an era of competing for existing users: a focus on Super Members.

The cultivation of a paying mindset among users of domestic streaming platforms has been a long and challenging process. In earlier years, rampant piracy made it difficult to generate direct economic value from digital music. Although TME's QQ Music experimented with paid services as early as 2007, for a long time, social entertainment services (such as WeSing and live streaming) accounted for half of the company's revenue.

As China's copyright environment improved and streaming platforms navigated the establishment and subsequent dismantling of exclusive copyright barriers, the market gradually returned to its essence: paying for quality content.

Today, basic subscription tiers no longer fully meet the demands of a segmented market. By introducing a multi-level membership system, TME has successfully converted a segment of high-net-worth users into "Super Members." The financial report noted that, benefiting from deep collaborations with record labels and artists and the introduction of high-value new benefits, the number of Super Member users surpassed 20 million by the end of 2025.

This is not merely a price increase but a restructuring of benefits. TME has enlisted popular artists such as Ding Yuxi, Ju Jingyi, and Wang Junkai as endorsers and offers Super Members differentiated services like priority ticket packages for the QQ Music 2026 Super Night and access to high-quality audio formats. When classic works by established artists like Eason Chan and Andy Lau are enhanced with Dolby Atmos sound, users are purchasing more than just the right to listen; they are buying an immersive, premium experience.

This shift towards a higher-value ecosystem is a natural progression for an advanced streaming platform. While deepening its subscription revenue stream, TME has also identified another growth curve: non-subscription businesses.

If music subscriptions are TME's defensive moat, then non-subscription businesses centered around live events and merchandise are its new engine for profit growth. In 2025, TME's online music non-subscription revenue grew 39.2% year-over-year to 9.07 billion yuan for the full year. In the fourth quarter alone, this segment's revenue increased 40.8% to 2.54 billion yuan. This rapid growth is underpinned by TME's effective monetization of IP value.

Against the backdrop of steady profit growth and strong cash flow, dividend distribution became a natural outcome. The company's board of directors approved the payment of an annual cash dividend for the 2025 fiscal year, amounting to $0.12 per ordinary share, with a total distribution of approximately $368 million.

However, the path ahead for TME is not without challenges. Penetration in the online music market is nearing its ceiling, and the decline in monthly active users is an undeniable reality. Short-video platforms like Douyin and Kuaishou remain crucial channels for music promotion and continue to fragment users' entertainment time.

TME cannot afford to rest on its laurels. Faced with evolving user demands and competition from players in adjacent sectors, only by continuously deepening its differentiated content advantages and exploring commercial opportunities across multiple scenarios can it ensure this revenue stream continues to generate value sustainably.