China’s two listed music platforms no longer give an outside rights holder a clean quarterly answer to a basic question: did subscription income grow because more people paid, or because each person paid more? NetEase Cloud Music says its subscriber base grew in the first half of 2026 while average revenue per paying user fell. Tencent Music Entertainment (TME) stopped publishing quarterly paying-user and average-revenue figures this year. For an independent label budgeting a China release, the gap matters because platform revenue growth is not a royalty forecast.
This is a different question from our recent reporting on China’s songwriter collection deductions and payment dates, and from another desk’s general warning that streaming-company growth is not a catalogue forecast. Those pieces followed collection costs or the budgeting principle. Here the issue is the China-specific loss of quarterly subscriber measures, alongside NetEase’s unusually explicit admission that subscriber growth diluted average yield. The two filings show exactly where the public evidence stops before a label commits money to this market.
NetEase gained subscribers at a lower average yield
In its interim report published on 24 September 2026, NetEase Cloud Music says subscription membership revenue rose in the six months to 30 June because its subscriber base expanded. The company adds that changes in the subscriber mix diluted monthly ARPPU, or average revenue per paying user. It gives the direction of both movements, but does not give the paying-user count or the size of the ARPPU fall in that report. A reader therefore cannot calculate how many extra subscriptions offset the lower average yield.
NetEase’s 24 September report puts membership subscription revenue at RMB2.601 billion (about US$383 million) for the first half of 2026, against RMB2.470 billion (about US$364 million) a year earlier. Those dollar equivalents use RMB6.7851 per US dollar, the 30 June 2026 rate stated in NetEase’s 20 August 2026 results; they are comparison conversions, not historical exchange rates. The increase is real, but NetEase’s own explanation says the extra membership money did not come from a higher average payment per subscriber.
The same interim report records online music services revenue of RMB3.067 billion (about US$452 million) for the first half of 2026, up from RMB2.967 billion (about US$437 million) in the comparable period. Subscription income sits inside that wider line. The remainder is not another kind of subscription. Treating all online music services revenue as a subscription pool would overstate what the subscription figure tells a catalogue owner.
NetEase also spent more to find and retain an audience. Its 24 September report says selling and marketing expense rose from RMB163.4 million (about US$24.1 million) in the first half of 2025 to RMB295.2 million (about US$43.5 million) in the first half of 2026, mainly because of promotion and advertising for brand awareness and user acquisition. Operating profit declined from RMB844.5 million (about US$124.5 million) to RMB746.2 million (about US$110.0 million). These conversions use the same 30 June 2026 rate. The report attributes the profit decline primarily to that promotional spending. It does not say how much of the spending acquired paying subscribers or which music those subscribers heard.
That distinction is especially relevant to a foreign independent. A platform can add paying accounts and spend more to do it while the average payment per account slips. None of those movements establishes the value of an individual recording. The useful question for a distributor or label is whether its own China statement shows additional payable uses, a better effective rate under its agreement, or merely more activity around the platform.
Tencent changed the measuring stick
TME’s 17 March 2026 full-year release was its last quarterly table for online music monthly active users, paying users and ARPPU. For the fourth quarter of 2025 it reported 127.4 million online music paying users, up 5.3 per cent from a year earlier, and monthly ARPPU of RMB11.9 (about US$1.70), up 7.2 per cent. That dollar equivalent uses the RMB6.9931 per US dollar rate stated in the same release for 31 December 2025. TME said it would instead report total paying users across its music services annually at year end.
TME explained the change in that March release by pointing to advertising, intellectual property offerings and multiple membership tiers. It said revenue and profit had become its primary performance indicators. That explanation is plausible as an account of a broader business model. It also removes the quarterly denominator that let outsiders separate subscriber growth from average subscriber spend. The fourth-quarter 2025 figures cannot be carried forward as though they described the second quarter of 2026.
In its 11 August 2026 results, TME reported second-quarter membership services revenue of RMB4.79 billion (US$706 million), up 8.1 per cent year on year. The company expressly says the consolidation of acquired audio platform Ximalaya contributed to that increase. It completed the acquisition on 18 May and included Ximalaya’s results from that date. The same release defines membership services to include access to music and audio content alongside other member benefits. So the line is not a like-for-like measure of music streaming subscriptions alone.
The rest of TME’s music-related revenue is wider still. Its 11 August release reported RMB2.81 billion (US$415 million) in second-quarter marketing and consumption services, a line it says mainly comprises advertising, offline performances and artist merchandise. Music-related services as a whole reached RMB7.61 billion (US$1.12 billion). Adding these categories produces a picture of TME’s commercial reach, but it does not produce a per-stream price or a single pool from which all recording royalties are paid.
TME’s same release says social entertainment services and other revenue fell 16.4 per cent year on year to RMB1.33 billion (US$196 million) in the second quarter. That is another reminder that a platform’s overall growth can mask changes in where consumers spend. A label using the company’s total revenue as a proxy for catalogue earnings would combine businesses with different customers, products and rights.
What the filings can support
Chinese business press has covered the contest for users. Yicai’s 20 August 2026 report highlighted NetEase’s higher marketing expense and Tencent’s deeper links with Weixin. Caixin’s 11 August 2026 report described pressure on Tencent’s membership and advertising businesses, although the accessible Caixin page provides only a short article excerpt. Our question is narrower: what evidence in the two issuers’ own accounts can support a catalogue revenue assumption?
The answer begins with separating three measures. Audience size measures the possible reach of a service. Subscription revenue measures money customers paid for a bundle of benefits. A rights holder’s statement measures what its agreement and the platform’s usage reporting allocate to its repertoire. The first two can signal a market opportunity, but neither determines the third. NetEase’s subscriber-mix disclosure and TME’s changed reporting make that separation more necessary, not less.
The National Copyright Administration of China’s 6 January 2022 statement called for digital music licensing to use minimum guarantees plus a share based on actual usage, except in special circumstances, and for catalogue ownership and scope to be clear. It did not publish any platform’s current deal terms. That policy points to the documents a label actually needs: the licence scope, the applicable guarantee and usage-share provisions, and the statement showing how plays were attributed. No public earnings release supplies those documents.
For a label in Lagos, Nairobi or Accra, the practical test is to keep China platform performance and China catalogue receipts in separate columns. Confirm that the recordings are delivered and matched to the right titles. Ask the party accounting to the label which services and uses the statement covers, whether any minimum guarantee is recoupable, and how subscription, advertising and other licensed uses appear. Compare payable use and the resulting receipt across periods before increasing a release budget. These are questions for the label’s own contract and statements, not figures that can be lifted from a listed company’s investor presentation.
China’s platform accounts still matter. NetEase tells us directly that a larger subscriber base can coexist with a lower average yield. TME tells us that a growing membership line can include acquired audio and benefits beyond music listening. What neither tells a foreign independent is its share of the money. Until the catalogue statement answers that, platform growth is context, not cash.
