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Tencent Music listed on the New York Stock Exchange

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Tencent at the Digital Entertainment Expo & Conference in Shanghai, August 3rd. Aly Song / REUTERS

Eight months after the IPO of Spotify, streaming music is invited back to Wall Street. Wednesday, December 12, the Chinese platform Tencent Music is to enter the New York Stock Exchange. Little known outside its national borders, it nevertheless shows performances to envy the Swedish service and all of its Western rivals.

The subsidiary of Tencent, the first Chinese Internet group, must fix its introductory price on Tuesday. In its prospectus, it says it wants to raise between 1.07 and 1.23 billion dollars (between 940 million and 1.08 billion euros). And aim for a valuation ranging from 22 to 25 billion dollars, in line with the market capitalization of 23.7 billion of Spotify.

Originally scheduled for mid-October, the transaction was postponed due to the sharp decline in US markets, especially technology stocks. Since then, the downward trend has continued. But, according to Reuters, Tencent hopes to take advantage of the slight lull in Sino-US trade relations, fearing a more difficult climate in early 2019.

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“A community for music fans”

Since the acquisition of China Music in 2016, Tencent Music controls most of the Chinese streaming market. Its four platforms (QQ Music, Kugou, Kuwo and WeSing) are the most popular in the country. In particular, they benefit from their integration with WeChat messaging and the QQ social network, both owned by Tencent and with nearly 2 billion followers.

Every month, its music applications attract more than 800 million people. This is four times more than the 191 million users of Spotify, and sixteen times more than the 50 million subscribers to Apple Music. By the way, only “170 million Americans listen to a song streaming at least once a year”says Russ Crupnick, director of MusicWatch.

The strength of Tencent Music's services is not just based on the 20 million titles available to listen. But also on karaoke videos recorded by users or the live streaming of concerts. “We are not a streaming platform, but a community for music fans”, summarizes the company.

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Tencent Music gross margin stands at 41%, compared to 25% for Spotify

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