BUSINESS

Tencent Music Leans on Parent Ecosystem as Rivals Surge

Published: Aug. 12, 2026 3:54 p.m. GMT+8

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Tencent Music is responding to growing competition by drawing more traffic from elsewhere inside Tencent. Photo: IC photo

Tencent Music Entertainment Group is tying itself more closely to parent Tencent Holdings’ ecosystem as faster-growing free-music apps from rival ByteDance Ltd. put pressure on its users, subscriptions and advertising business.

The company reported second-quarter revenue of 8.93 billion yuan ($1.32 billion), up 5.8% from a year earlier, while profit rose 4.4% to 2.69 billion yuan. Growth in both measures slowed from the previous quarter.

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Tencent Music Q2 revenue 8.93B yuan (+5.8%), profit 2.69B yuan (+4.4%), growth slowed amid ByteDance competition.
ByteDance's Soda Music (167M MAU) and Tomato Music grew 68.7% and 39.7% in June, while Tencent Music’s user base declined.
Tencent Music boosts integration with Tencent ecosystem, including WeChat channels, AI assistant, and acquired Ximalaya.

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Who’s Who

Tencent Music Entertainment Group: Tencent Music Entertainment Group reported slower Q2 growth (revenue up 5.8%) as it faces competition from ByteDance's free apps. It is tying itself closer to parent Tencent by integrating newly acquired Ximalaya, taking over music operations on WeChat Channels, and using WeChat's AI assistant, while users declined across its major products.

Tencent Holdings: Tencent Holdings, the parent of Tencent Music, is highlighted in the article for its broad ecosystem. Tencent Music is leveraging Tencent's WeChat, AI, Pay, games, video, and China Literature to counter growing competition from ByteDance's free-music apps.

ByteDance Ltd.: According to the article, ByteDance Ltd. is a rival to Tencent Music. Its free apps Soda Music and Tomato Music saw MAU growth of 68.7% and 39.7% in June. Soda Music had 167 million monthly active users. ByteDance has built a content ecosystem loop, with Douyin providing traffic for its audio and short-drama services.

Ximalaya: Ximalaya, a newly acquired audio platform by Tencent Music, boosted subscription revenue 8.1% post-integration. However, its users declined per QuestMobile. Tencent Music plans deeper ecosystem integration, converting China Literature novels into audiobooks and directing Tencent Video viewers to related audio content.

China Literature: China Literature, backed by Tencent, provides online novels. These novels can be converted into audiobooks for Ximalaya, Tencent Music's newly acquired audio platform, while Tencent Video helps direct TV drama viewers toward related audio content.

QuestMobile: QuestMobile is a data provider cited in the article. It reported that ByteDance’s Soda Music and Tomato Music were the fastest-growing music apps in China by June MAU, while Tencent Music’s major products experienced user declines.

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What Happened When

May 2026：: Tencent Music acquired Ximalaya and plans to integrate it more closely with Tencent's other content businesses.

June 2026：: According to QuestMobile, Soda Music and Tomato Music (from ByteDance) were the fastest-growing music apps in China by monthly active users, rising 68.7% and 39.7% respectively.

June 2026：: Soda Music had 167 million monthly active users, making it China's third-largest online music platform behind Tencent Music's Kugou Music and QQ Music, ahead of NetEase Cloud Music.

June 2026：: By contrast, users declined across Tencent Music's major products (Kugou, QQ Music, Kuwo Music, WeSing, Ximalaya) according to QuestMobile.

2026 (Q2)：: Tencent Music Entertainment Group reported Q2 revenue of 8.93 billion yuan, up 5.8% year-over-year; profit rose 4.4% to 2.69 billion yuan. Growth slowed from the previous quarter.

2026 (Q2)：: Tencent Music's subscription revenue increased 8.1% to 4.43 billion yuan following the integration of Ximalaya, but remained below double-digit growth rates of much of 2025.

2026 (Q2)：: Music-related services (77% of Tencent Music's revenue) rose 11% to 6.85 billion yuan.

2026 (year)：: Tencent Music stopped disclosing monthly active users after the metric began declining.

2026 (year)：: Management acknowledged on an earnings call that competition from ByteDance was weighing on subscriptions and advertising, with growth increasingly coming from concerts, IP-related spending, and the newly acquired Ximalaya.

2026 (year)：: Tencent Music is responding by drawing more traffic from inside Tencent: taking over music operations on WeChat Channels, working more closely with Tencent's games and WeChat Pay, and reducing spending on outside traffic-acquisition channels.

2026 (year)：: Tencent Music is using WeChat's AI assistant as a new gateway to music services; early testing showed the feature improved retention among highly active users (stated by CEO Liang Zhu).

2026 (year)：: The strategy mirrors a content loop ByteDance has already built around its own ecosystem (Tomato Novel to Tomato Listening and Hongguo, with Douyin providing traffic).

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