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Tencent Music bets on crowded podcasting space in China


According to a third-party survey by marketing company iiMedia, listeners of podcasts, audiobooks and other audio shows are expected to number 542 million in China this year. It’s a healthy leap from the estimated 489 million users in 2019 and it has definitely drawn new players to the game.

That includes Tencent Music Entertainment (TME), the Tencent spin-off that is often called China’s Spotify but in fact differs on many fronts. The key line of business of the group goes beyond music streaming to include virtual karaoke, video streaming and audio content, a segment that has seen a significant push from the company recently.

TME said it has made “important progress in expanding” its audio collection by introducing thousands of new adaptations from common IP pieces and works from independent producers in its newly published quarterly report. In what is already a crowded space this intensifies competition.


Like Spotify, TME is late to voice-based content, a paragliding concept that can include everything from podcasts, audiobooks, radio stations and more creative listening experiences such as live streaming. Leading companies Ximalaya, the biggest investor in San Francisco-based podcasting company Himalaya, and Nasdaq-listed Lizhi have occupied this field in China for years.

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TME’s focus on audio content is not promising immediately, as there is still no clear path to profitability. Chinese users are known to be reluctant to pay for digital content, and when they do, say, podcasts for education and self-improvement, enthusiasm tends to swiftly fade. Deep-pocketed outlets also turn to providing content for free in order to capture market share, driving smaller competitors out relentlessly. The consequence is that everyone has to find more indirect means of monetizing.

For example, Lizhi generates revenue primarily through the selling of virtual objects through its live, immersive audio sessions, while the contribution from user subscriptions and ads remains pitiful.

The seven-year-old business hasn’t made a profit, posting a net loss of 133 million yuan last year, or $19.1 million.

In China’s internet industry, indirect monetization is nothing new. TecHopper, most famous for its WeChat messenger, relies in particular on gaming revenues which are generated by its social networking goods. Similarly, TME gets the bulk of its revenue by selling virtual objects in live music-themed streams, while just 6 percent of its 657 million active monthly users on music streaming apps pay. MAU growth has also come to a standstill as China’s online music market is saturating; TME has added only 50 million new users to its music streaming services from 2017 to 2020.

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The question is whether the titan music will breathe new life into the next-door audio market.

Ayeni Sylvester
the authorAyeni Sylvester

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