Tencent Music generated RMB8.93 billion, or $1.32 billion, in second-quarter revenue, up 5.8% year over year. Music-related services grew 11% to $1.12 billion, membership revenue increased 8.1% to $706 million, and newly consolidated Ximalaya contributed $60 million after the $2.4 billion acquisition closed on May 18.
Ximalaya expands Tencent Music beyond songs and karaoke into audiobooks, podcasts and long-form audio, giving the company more inventory, membership products and occasions to monetize across the listening day.
Ximalaya Turns Listening Time Into a Larger Addressable Market
Tencent Music already controls QQ Music, Kugou Music, Kuwo Music and WeSing. Those services monetize music subscriptions, premium benefits, advertising, karaoke and social interaction. Ximalaya adds spoken-word programming and a separate base of creators, listeners and paid content.
The first consolidated quarter shows the immediate revenue contribution, while the larger return depends on integration. Tencent Music can bundle benefits, cross-promote programming and move users between music and long-form audio without paying to reacquire the same customer through an outside distributor.
Long-form audio also expands daily use beyond music occasions. Commuting, education, fiction, talk and bedtime listening create sessions that don’t depend on a song release or playlist. More listening contexts give Tencent Music additional opportunities to sell memberships, advertising and premium content.
Membership Revenue Is Carrying the Business
Music-related services now generate most of Tencent Music’s revenue growth. Membership revenue reached RMB4.79 billion, while social entertainment services and other revenue declined 16.4% to RMB1.33 billion.
That mix gives subscriptions and paid benefits more responsibility for the company’s performance. SVIP membership, digital albums, fan packages and Ximalaya can increase revenue per paying user without relying entirely on subscriber additions.
The music business is separating into broad subscription access and higher-spending fan relationships. Tencent Music operates both sides. Standard memberships monetize access, while concerts, merchandise, digital albums and artist-specific benefits capture more spending from engaged fans.
Tencent Can Distribute Audio Through Its Own Ecosystem
Tencent Music expanded music distribution through Weixin Video Accounts, used Weixin Pay to send traffic into lightweight music apps and added voice-based song and playlist access through Weixin XiaoWei. It also introduced vertical swipe discovery and expanded freemium access to increase daily usage.
Those integrations reduce dependence on paid acquisition and external app stores. Discovery can begin inside Weixin, payment can remain inside Tencent’s commerce environment, and the listening session can move into QQ Music, Kugou, Kuwo or Ximalaya.
The value compounds when Tencent Music can use behavior across formats. Music listening can inform concert and merchandise promotion. Long-form audio consumption can improve recommendations, membership packaging and creator investment. Payment data can show which audiences convert from free discovery into premium products.
Integration Costs Will Decide the Acquisition Return
Ximalaya increased revenue and helped gross margin, while also adding content costs and acquisition-related amortization. Tencent Music must combine catalogs, product benefits and distribution without duplicating technology or confusing the membership structure.
The acquisition also raises expectations. A $60 million quarterly contribution represents an early revenue base, while the $2.4 billion purchase price requires sustained growth, cross-selling and cost discipline. Simply consolidating Ximalaya’s existing business won’t capture the full strategic return.
The Streaming Wars Take
Tencent Music can now monetize more of the time between songs. Music subscriptions, spoken-word audio, video discovery, karaoke, concerts, merchandise and premium fan products sit inside a distribution system connected to Weixin and Tencent’s payment infrastructure.
The acquisition return will depend on Ximalaya’s standalone contribution and the additional revenue Tencent Music can generate from shared users. Successful integration lowers acquisition costs, increases paid conversion and creates more surfaces for premium products. Those capabilities would establish the combined company as a vertically integrated audio business.
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