Despite Soda's Threat, Tencent Music Positioned for Growth With Upside for Subscribers and Pricing

The music streaming industry in China is still in its early stages of development, and Tencent Music has established itself as the clear market leader. While it is often compared with Spotify, we believe Tencent Music enjoys a more favorable competitive position due to its deep integration within the broader Tencent ecosystem, the absence of YouTube as a free streaming alternative, a wider range of service offerings including livestreaming and karaoke, and a stronger focus on in-house content development.