Paid User Growth Slows, AI Songs Surge: Who's Paying for Tencent Music's IP Story

Originally from: Shell Finance

On March 17, Tencent Music announced its Q4 and full-year 2025 financial results. The data shows that Tencent Music’s total revenue for 2025 reached 32.9 billion yuan, a year-over-year increase of 15.8%, with a net profit of 11.35 billion yuan. Among these, online music service revenue was 26.73 billion yuan, up 22.9% year-over-year; social entertainment services and other services revenue totaled 6.18 billion yuan, a decrease of 7.3%.

Over the past three years, Tencent Music’s online music service revenue and paying users have been growing positively, but the growth rate has slowed. In the context of user competition, Tencent Music relies on music copyrights and IP branding for its business story—who will bear the cost? AI music is diverting some user attention; how should content consumers and creators prepare in advance? These are challenges Tencent Music faces in the content industry.

Online Music Service Paid User Growth Slows

After reducing reliance on social entertainment service revenue, online music services have become Tencent Music’s main income source. Although revenue from online music services is still growing, the growth rate has slowed. According to the financial report, over the past three years, this business’s revenue increased by 38.8%, 25.5%, and 22.9%, respectively. The core segment’s online music subscription revenue growth has also slowed, with year-over-year increases of 39.1%, 25.9%, and 16% from 2023 to 2025.

In response, Tencent Music is exploring non-subscription revenue streams through advertising, offline concerts, merchandise sales, and other methods centered around music IP. But platform users are the ones paying for content—how much longer can Tencent Music’s user value be tapped?

Currently, although the average monthly revenue per paying user (for online music services) continues to increase year over year—reaching 10.7 yuan, 11.1 yuan, and 11.9 yuan over the past three years—the growth rate of paying users has begun to slow. By Q4 2025, Tencent Music’s paying online music users reached 127.4 million, a 5.3% increase year-over-year, compared to 20.6% and 13.4% growth in 2023 and 2024, respectively.

Meanwhile, the total active monthly users for Tencent Music’s online music services have been declining for several years. The financial report shows that as of Q4 2025, the monthly active users (on mobile, prior to 2022) totaled 528 million, down 5% year-over-year. From 2020 to 2024, the declines were 3.4%, 1.1%, 7.8%, 4.2%, and 3.5%, respectively.

AI Song UGC Platform

At the analyst conference, Tencent Music attempted to continue discussing membership users and music IP business, but external attention is more focused on AI impacts.

Tencent Music executives stated that AI-generated songs have exploded in the past three months, mainly covers promoted on short video platforms. The scope of original AI-created songs remains limited, and their quality has not significantly surpassed human-made music. On the consumer side, there has been little change in original songs.

Tencent Music’s leadership suggested that the future of AI songs might be UGC (user-generated content) music, gaining more dissemination on social networks. “UGC content generally doesn’t significantly change current copyright sharing; the emphasis remains on PGC (professionally generated content) or OGC (organization-generated content).”

Tencent Music’s strategy is to enable many users to produce content via AI tools, creating a music-based social media platform on TME. Current AI strategies include providing an all-in-one AI music creation tool to boost productivity, promoting AI songs while ensuring traffic for genuine original content, and upgrading AI Agents to improve user experience.

“AI can indeed make song creation more convenient, but the value of copyrights lies not only in the songs but also in the IP itself. Tencent Music will continue to invest heavily in IP creation and production. Offline music experiences are also hard for AI to replace,” said Tencent Music’s executive.

Editor: Yang Juanjuan

Proofreader: Liu Jun