On Tuesday, China’s Tencent Music Entertainment Group (1698. HK) beat quarterly revenue projections as its Spotify-like music streaming platform gained paying members, driving its U.S. shares 9% higher in premarket trade.
The company’s chief strategy officer told analysts in the evening that Tencent was developing various artificial intelligence (AI) products, from a chatbot to a music production tool.
According to Refinitiv statistics, Tencent Holdings Ltd.’s first-quarter revenue grew 5.4% to 7.00 billion yuan ($1.01 billion), ending five consecutive quarters of revenue drops and topping analysts’ projections of 6.86 billion.
The company prioritizes paying user growth. Over the three months, its online music streaming service had 94.4 million paying subscribers, up from 88.5 million, and music subscription revenue grew 30.4%.
“We are glad to achieve a record-high online music paying ratio and expand [average revenue per user] for the fourth consecutive quarter,” said Tencent Music Executive Chairman Cussion Pang.
Equity holders earned 1.15 billion yuan, up from 609 million a year earlier.
Tony Yip, its chief strategy officer, told analysts that the company was developing a chatbot for customers to discuss “the kind of music they like to listen to and to discover new content”. He noted that Tencent Music collaborated with Tencent Holdings to create products using the parent company’s vast language strategy.
Yip said Tencent Music was developing AI technologies like Google’s MusicLM, which turns language into music. “We will provide tools to help… with song creation and lyrics writing,” he stated.