Company: TME
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0000950170-25-056949
Chunk: 225

Company: Tencent Music Entertainment Group
Filing Date: 2025-04-23
Form: 20-F
Item: Item 5
Chunk 225
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 The number of paying users increased by 16.6% year-over-year to 117.6 million. The growth was primarily due to high quality content, attractive membership privileges, and optimized user operations. Monthly ARPPU increased to RMB10.8 in 2024 from RMB10.0 in 2023, primarily due to effective promotions and the successful expansion of our SVIP membership program. The year-over-year increase in revenues from advertising was primarily due to our more diversified product portfolio and innovative ad formats, such as ad-supported mode.
Social entertainment services and others
Our revenues generated from social entertainment services and others decreased by 36.1% from RMB10,427 million in 2023 to RMB6,659 million (US$912 million) in 2024. The decrease in revenue was mainly due to adjustments made to certain live-streaming interactive functions and more stringent compliance procedures implemented.
Cost of revenues
Our cost of revenues decreased by 8.8% from RMB17,957 million in 2023 to RMB16,376 million (US$2,244 million) in 2024, primarily due to decrease in service costs by 15.5% from RMB14,176 million in 2023 to RMB11,974 million (US$1,640 million) in 2024. The declined revenues from social entertainment services led to lower revenue sharing fees, which was the primary reason for the overall decrease in service costs. Meanwhile, our content costs of royalties increased year-over-year.
Other cost of revenues increased by 16.4% from RMB3,781 million in 2023 to RMB4,402 million (US$603 million) in 2024, which was primarily attributable to higher costs related to offline performances, higher advertising agency fee and payment channel fees.
Gross profit
As a result of the foregoing, our gross profit increased by 22.8% from RMB9,795 million in 2023 to RMB12,025 million (US$1,647 million) in 2024. Our gross margin increased from 35.3% in 2023 to 42.3% in 2024. This increase in gross margin was primarily driven by strong revenue growth from music subscriptions and advertising services, as well as the ramp up of our own content. Additionally, our revenue growth outpaced the increase in content costs of royalties, which positively impacted our margins. Furthermore, the reduction in revenue-sharing