Tencent ups quarterly income after streamed content deal
DetailsRebecca Hawkes | 15 May 2015
Chinese technology giant Tencent Holdings has posted a 7% year-on-year rise in quarterly net income, just weeks after acquiring streaming rights from Fox for sports and documentary TV channels.
The Hong Kong-listed company, which operates one of China's best-known messaging services WeChat, said revenues were boosted by video game sales and online advertising.
Net profit was reported at ¥6.88 billion (US$1.1 billion) for the period ended 31 March 2015, against forecasts of some ¥6.5 billion.
In April, Tencent – which competes with e-commerce company Alibaba for mobile users – won online video rights to 21st Century Fox TV channels Fox, Fox Sports and the National Geographic Channel. It already holds rights for Time Warner's HBO network, the US National Basketball Association (NBA), and for streamed music from Sony Music Entertainment and Warner Music Group.
"We've paid aggressively to buy some of the most popular content, the most established brands," James Mitchell, Tencent's chief strategy officer, recently told Reuters.
The Shanghai-based company's revenue for the period rose 22% to ¥22.4 billion from the previous year.
Announcing the results, Ma Huateng, chairman and CEO of Tencent, said: "Our key mobile properties extended their leadership in China and continued to broaden user activities from social and communications to gaming, entertainment, media content, payment, and beyond. Driven by mobile social and video advertisements, our total advertising revenue more than doubled year-on-year.
"Looking ahead, we aim to bring further technology benefits to users through our 'Internet +' strategy of connecting users with services in various vertical industries through collaboration with a broad range of partners."
Revenue in China's online entertainment industry is predicted to double by 2018 to more than ¥$46 billion for online games and video streaming alone, according to iResearch.