Q1 2020 Earnings Call
[music].
Ladies and gentlemen.
Good evening and good morning, Thank you for standing by welcome to the 10 Music Entertainment group.
2021st quarter earnings Conference call.
Okay, we had discussions from the management team [laughter] Music Entertainment group.
Oh I bought question and answer session.
Hi, standby this conference is being recorded today.
Now I will kind of copper ever to your speaker, how does that make no sense to.
Please go ahead ma'am.
Thank you operator, Hello, everyone and thank you all for joining us on todays call.
Hi, some use a nice its quarterly financial results today after the market well.
And it's pretty easy smell available on <unk> website at <unk> Dot com as well as my Newswire services.
Today, you will hear from the caution our CEO, who will start the call with an overview of recent achievements and growth strategy.
He'll be followed by Mr., Tony you, Oh, I see I felt who will offer more details on the operations ambitious development.
Let me make charity, who our CFO will address our financial results before we open the call for questions.
Before we proceed. Please note that this call may contain forward looking statements made pursuant to the safe Harbor provisions.
The Party Securities Litigation Reform Act off night, you 95.
These forward looking statements are based on management's current expectations that observation that involve known and unknown risks uncertainties and other factors no under the company's control, which may cause actual results performance or achievements of the company to be materially different from the result, the foam and what's the patients.
Implied by these forward looking statements.
Well focus David Hi spreads to be quite fighting back <unk> by the cautionary statement rich subjects and details the company's filings with the FCC.
The company that's not what's your any obligation to revise or update and you focused statement. That's a result of new information future events changing market conditions or otherwise, except as required by law.
Please also note that the company would discuss snow and ice measures today, we shall box already explained and reconciled to the most comparable measure reporting under international financial reporting standards in the company's understudies and find ways with actually see.
Reminded that such non-GAAP measures should not be view in isolation, Oh, it's been a ton of chip they tend to be equivalent I advise measure and then known I emphasize measure I know you when you hold me to falling but all companies, including those in the same industry.
With that I'm, not very pleased to 10 over the call it shouldn't be scrapped crashing pollen allergies C O caution.
Thank you medicine.
What do you want and thank you for joining our call today.
I bet you imaging I do want off the Okay. I think we released our 20 Nike Andrew it's almost two months ago.
You can go onto weighing a mock like last time, we still have a sliding things under the Moscow and everyone opposite TMB remain very positive.
It is because we truly believe that we have been won't be happy doing it's very valuable trial, usually central time.
Music is really the medicine that can heal and the company with people no matter what the situation is.
See every one of you well drilling to pandemic pretty weak and we all together.
In the first quarter upon Tony online music subscription nothing you spoke a fairly good high school.
Increasing 70% year over year, compared with 60% and 40% you default and first quartile plenty 19.
Well not easy pay usage, we stood at 42.7 media.
People spend year over year.
They do we show expanded to fix on 5%.
Bolt ons repurpose and for the same quarter will probably be 19.
Yeah Pp you follow on 96 purposes increases, but you could spend year over year I'm already benefiting from uses increasing need in Mississippi or premium subscription package.
Oh spending online music subscription revenues flow mitigated the softness in all the Nonsubscription Bad news.
Well the bison formed an open 19 pent up.
We sold in 27% overall year over year about an equal well online music services.
Oh, Okay strategic focus student, let's call the crude.
Dan, reaching our leading content offering.
Coming all pick a GDP.
In college, and discovery and promotion.
Paul I think you'll be nutrition.
In total, but enriching content.
Anyway, yeah mixing it depends quick must be long from all of you.
Uh-huh under penetrated the fossil when market in China, we are committed to show.
Recently.
The strategic policy with China, maybe try in August.
We have gained access to an extensive lobby, we all high quality IP.
And exclusive license is awesome page totaling online pick interest he was the tremendous that's based in China.
Now we have obtained at the old you'll have to patients right off the majority of tiny little interest Paul hundred most people on board.
No difference audio books.
We will also go do high quality, all do drama, who helps to IP to realize more than twice the buddy.
Hi phosphate.
Talking to position us at the forefront altogether.
Actually I blessedly scale up content offering.
But the vitamin off <unk> ecosystem. That's also achieved initial success.
Hi, good enough April 2020.
Oh got bomb attracted approximately 10000, new pocket and many established appeal L.
Including well know Hopkins right.
An online bought costas.
Due to walk freemium MGC or do you walk.
Oh, So we'll do the older programs, although I do weeks.
That.
That's a cheap to over 1 billion total screens.
Last month and become a very popular the old you show the could you for the younger than topic.
[laughter] on April 20 foot.
Launch a new applications for long time molecule cool jumping.
Taking another important step to pull bike dedicated audio entertainment stuff. This is through our uses.
We also began to roll I'll separate long form or do a membership package.
Oh, you see vitamins, we will help us build a solid foundation our.
I will do for development.
And realized small backing up on synergies between online music and long phone audio business.
Second.
We continue to solidifies our content either sheet [laughter] population <unk> enjoy the by the younger demographic.
The cooperation between group.
Oh, Triptans losses, Oh, well step has higher selling black hawk companies in declines this factory.
Enable us to seek more opportunities have you good acos or relationship.
A powerful offerings highly popular content.
On the Japanese office, we also actively explore new interactive game, Craig Hutchison treat talks premium content, you bring an interactive and comprehensive Snoozing Stephens, all listening watching singing and socializing.
I said, we sell a pencil has become a popular destination poultry companies in China.
[laughter] on supporting all original content creation.
I mean again, we demonstrated our unique capability and know how in Thailand discovery cultivation and promotion.
Thanks to all fall schooling you'd be musician program. The number of participating musicians and original songs produce a couple that year over year into first quarter Opcone quantity.
You rolled out and Truckee financial incentive plan earlier this year.
He has lead to truly impressive growth into nimble indeed musician Sol [laughter] exclusively licensed it to us which increased by more than 800 percentage.
800% year over year.
And when that makes one log to promote you'd be music.
Lost it pulls on kind of see you know gilat popping emerging musicians and also formed a strategic alliance with baby food and long haul program can be done. Thank you all to further enhance the cooperation with independence musicians and kill out.
Additionally, we continuously lapping a profound don't usually insight and powerful promotional capabilities to support in d. musicians to reach finds itself Media's off music lovers.
Last quarter, we shared this oh, yeah, hi than Aquasil seen a and B song build out of the bridge choppy as well.
Caught up I'm pleased to share a few more successful installment.
The world he so big to meet your she did you model I see weekend.
On the phone Echo trunk tell Michelle.
And you sound man a song called used to buy me well.
One of those phones will be used to doing that those quota and happened already achieved almost five beauty and to me like it seems on all pencil.
Yes, a 50000 [laughter] [laughter].
As a flaw schooling and eating indeed musicians program. It's a lot this music Musa baby.
Yeah, Larry piece to say, that's all mush.
But I suppose ponds lucky.
We have successfully promoted English as content.
Two hundreds of millions of users although pencil.
While difficult at 19 global pandemic has changed the businesses and the ways off like in different aspects.
Also brought emerging opportunities in the digital Leila.
We have seen some behavioral changes doing that knockdown and also an increasing number of uses listening to music we pull apart.
Pembinas, especially TV and smart devices.
This will be sold in the first quartile 2020.
Oh online music and they you on mobile devices and even home apparent. This includes the five 3.5% on the year over year pieces.
It should be hasty attached to this could be says even after the like returns to normal called the cold in liking pandemic and potentially provide additional avenues.
That being used to go.
The launch of T. M. You life. It's a great example of how we quickly and innovative lead deploy technology to bring offline concepts excuses online through live streaming.
If you five weeks after its launch we must 20 Twond D.
Successfully help five online concepts.
These include the ones well established the Austin like as eating into India.
I knew and when they do you were all Eugene.
Especially themes such as Penn West Pecans as well the popular web dramas. He was some they all one day sounds Ginny leveraging all sort of the partnership labels and optics.
We're very excited to have been strong and diversify the pipeline so ankle Ali you Ben.
You know also piece that they use a response TMB like you see the exceed our expectations.
That the better value creation cycle between online music and social and if he knows at this.
This concludes my prepared remarks, and now Tony will discuss the first call do we sell although social anything they surfaces. So oh, the focus area going to school I.
Thank you question Hello, everyone.
Apart from one question just mentioned they're out a few other exciting areas that we want to highlight for both our online music and social Entertainment services.
For online music services first we kept stepping up all assets to promote video enrichment.
We emphasized shouldn't videos through upgraded version of could go music.
This provides our users and additional dimension of entertainment, while increasing the exposure of video content creators on that platform.
It has also contributed to improved user engagement.
Leading to cool music increased do you penetration rate and daily average use a time spent on video content after the upgrade.
Second.
Well music streaming used to be a less socially interactive experience.
We continue to push foundries by building and promoting and engaging user community through our fan base to programs.
We insight and many artists the personal we interact with their fans on a platform.
Their engagement in online discussions and participation in some reviews in turn have contributed to better promotion result, and increased stream volumes off certain song on a daily basis.
Thirdly, we kept the sharpening our data analytics capability and refining our personalized recommendation.
In particular, the personal I play list continues to receive positive user response in the first quarter, but do you penetration rate and average stay me screens, Oh personalized play lists more than doubled on a year over year basis.
Now turning to social Entertainment services.
Well its revenue growth moderated due to the impact from coven 19.
Mobile and May you and paying user growth remain robust.
13% and 19% year over year, respectively.
Benefiting from the growth initiatives, we took to improve user engagement.
And positive impact from user spending more time or not unlike her okay platform during 2019.
With respect to online karaoke services.
First we continue to strengthen we things core Caro key features to make it more user friendly well uses to interact through singing.
Such Bose I may you penetration rate and date and average daily use a time spent off the song recording function achieved healthy sequential growth in the first quarter.
In addition to meet the evolving and expanding user demand, we incubated kugel titles huh.
Online karaoke.
Assigned to better serve kugel music users with deeper integration between music streaming and online singing across the two apps.
Despite its relatively early stage, we're pleased to see what we're trying to.
Achieving initial success with and they use growing 800% you over year to reach 9 million.
Second we focused on strengthening we things social attributes we continue to grow the number of online singing the blues based on diversified music centric themes.
In the first quarter of 2020, we are happy to see the unique real time, social attributes and interactive features built in the online singing and resulted in sequential increase in a single any you penetration rate and use a time spent.
Third we further strengthened video enrichment within we say.
With more types of video content now dynamically integrated and more video tool is deployed to make sharing easier and more eye catching.
This has boosted the amount of video content and average daily video users on we say.
Now for our live streaming services.
Against the impact caused by the Coven 19 pandemic.
We worked tirelessly on many fronts to paved the way for faster recovery in the second half of 2020.
We continue to expand content categories, such as game hasty Gi and matchmaking.
In the first quarter of 2020 over 30000 gaming hosts join him Kugel life.
And they see a penetration rate of game live streaming has been increasingly consist has been increasing consistently.
In particular Kugel life recently launch, we ship and Cotwo cooperation agreement with Tencent games.
Retaining their right to live broadcast.
Range of 10 cents games.
We will also add more interactive activities and privileges to further intensified she was a spending and continued broadening our live streaming content category to attract more new users.
And finally.
Can boost our promotional capabilities offline.
In April 2020, we acquired an equity stake in radio music warehouse radio.
Our MW in short a leading provider of licensed music streaming service to public venue in China.
From system design and integration to concentration that support.
Our MW isn't integrated solution provider of licensed music in public venues, including hotels restaurants supermarket convenience stores and more.
Compared with Europe, and the U.S.
This market in China is still at a nascent stage with promising long term prospects.
So tell me this investment serves as another important step to expand our comprehensive music entertainment platform from online to offline.
And with that I would like to turn it over to our CFO surely who for closer review of our financials.
Okay, Connie Hello, everyone.
Finally, turning to our revenue as well.
[laughter], beating up 10, but then to get over here driven by 27% growth you all my moved to somebody predominantly.
The Sleepless then rose so sometime this summer.
I'll now mucus, though this is eminent with well I'm being beaten up 27 for them to get over here.
The increase was amended agreement by the tend to I'll, then Oklahoma from music publishing.
Supplementing the by Giambrone, <unk> and what pricing.
<unk> gross profit a monkey.
Oh, sorry, I think we'd like this is done.
We would expect corporate revenue well one wanted to between 70% year over year, driven by teaching gross [laughter], Barbara and home and <unk>.
Basically long [laughter] Harbor inquiry to put that I know my <unk> letting puts it over here.
Reflecting continued [laughter] paying user retention and the content to pay was 50.
Social and 10 minutes away, an odd examiner well ballpoint they've been up he put then you only get pretty money driven by growth on noncore, Okay. I am I'm, hoping you.
Hi, Dave <unk> <unk> nine pm.
Meant to eat active we will try not to screaming.
And the change in time leasing and Uganda.
Yeah, well, you're basically he knows that grew 19%.
[laughter].
I'll keep you agree.
The <unk> percent, which was primarily due to impact from coffin 19, I used to reduce the then many uncertainties.
Well the just the most <unk> Act you feel well so hard to short term impact on <unk> nine wings.
[laughter] run.
Well one this big feeling.
Okay, then because then you over year.
Driven by higher revenues doing me and the comes from the Wednesday.
Our gross margin was that's one point, we posted in Q1 Plenti punky.
The decrease the 4.1 person.
But my 0.0 posted in Q1 thinking 19.
It wasn't meant was a beautiful too high revenues good movie.
Resulting from additional promotion like <unk> <unk>.
To mitigate the impact from <unk> nine PM and adjustment <unk>, you build trust Niweek screening.
I will increase the gravity is showing we show <unk> online her okay pro forma because based on our platforms the competitively.
Well, marking well I'm not really has improved in Q1, Twentytwenty and is expected to keep improving over time I. When we were watching them you grow.
Total operating expenses as well 1.2, beating up till puts in year over year <unk>.
Oh boy, they say apocalyptic total revenue was eight I'm, calling to book with that in Q1, Twentytwenty, increasing velocity from 18.1 cousins in Q1 thinking Nike.
The increase was mainly due to increased <unk> on the employee related costs as we continue between my on me. Two weeks, then I will put that can be easily.
The one thing on the PUC Lonny novation.
I was built on the market basically Oh I can take hold to grab anyway. The men that you'll be okay from Q1 hundred 19, as a result, I'll I'll go in walk on <unk>.
I would you talk text Reid will come close to 8% and in Q1 plenty plenty.
I wouldn't I talk with what's a good to great. How does the company I'm <unk>, there were calling tonight being not right not coffee, that's a beautiful <unk> how does the company on me one going to 1 billion <unk> I'm not worried the market was.
Hmm, calling my puts it.
Hi, Matt.
20 pumping.
I will come on the balance of cash and cash Kremlin Hum <unk>, well I'm being 21.9 billion, representing a decrease of 1 billion mom and baby Punky my feeling as of December.
When he 19.
<unk> equities in the balance was primarily due to Uma Thurman <unk> consortium, who put tour and equity interest when you want the mute.
During the quarter Huh.
Oh, yes, Barbie impart from often 19.
Or too drunk brought online music services.
Actually in music, perhaps as well as healthy growth in those are intended to be a nice in the post the called <unk>.
We expect to see the southern region, you only had growth into Mexico quota.
The call for the 19 pandemic, it's under control and easily rocky the getting back to normal in China.
Well long time perspective.
We continue to be optimistic about build up the broad the music industry.
We are confident oh, well, because it's something I put that hotline, that's the way our beauty.
We'll continue to book, Okay, and then I will put that on.
And the Soviets offering.
<unk> no audio while maintaining qualcomm's recommend.
This conclude our prepared remarks, operator were ready to open the call question.
Thank you we will now begin they question and answer fashion.
I ask a question. Please press star and then one on your attached Uh Huh.
If you're getting a handset twice picop care has talked before pressing the case, if you're using a speaker.
And Sir withdraw your question. Please press Star then too.
For the benefit of all participants on todays call. Please limit yourself to one question.
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Once again had a star then one to ask a question.
My first question today, that's fine at eight alone of Bank of America. Please go ahead.
Hi, Good morning, guys shopping ticket our questions or can we all saw two questions. The first one is oh, Oh, the Opole Graz eat not moving more Solomons, Oh thought to pay wall. So could you talk a little bit topology Oh recent.
Okay. That's fair last hottie Howe real for that and then second me or any more detail on the potential launch all by streaming filed with the not QQ music in terms of expanding outrage I'll talk you wish list I think it.
Sure. Thanks for your question.
In terms of pay wall, we've said that ends up the end of 2019, our constant behind the pay wall is approximately 10% Oh, the streaming volume on that platform.
And internally you know we estimate that by the end up this year the pay wall should account for approximately 20%.
You know off I'll streaming volume and you know as off the end of a Q1, we're on track to hit that 20% target.
Now however, I think we want to highlight that number one we're obviously very pleased with the online music.
Subscription revenue growth.
Growing 70% year over year, which is actually the fastest reported growth ever a you know you know we reported history and Ah we had suffered from a little bit of covert 19 impact that during the first quarter, but so without the impact from Covidien.
<unk> you know, we would have grown or even faster because music.
From an Emmy your perspective, as well as well as from Oh, resulting paying user perspective, Oh I saw some users tend to consume more cover oaky or games. Our video when they spent an unusually long time at home.
Right, so but on the other hand or if we were to include a music and they you a from in home Aiotv devices, such as spot speakers and smart TV, which is not currently included in our reported and May you data.
In order to include those out and they you would actually have grown a 3.5% on a year over year basis. So we saw a that are those in home device consumption on our platform actually mitigated some of the weaker a mobile and are you.
And so like we said before I think given we already have it very large user base in terms of music. I mean, you I'll focus continues to be driving user conversion from free to pay a and B continues but she could see can make excellent progress I'm a in the current quarter's results.
Oh.
The second question since about with when are we going to launch a two musical I've. Oh. This is a you know a prime you're going she launching into second half of this year, which is targeting to be in June two to lie.
On the team is working so hard and getting it ready for launch. So we are also people in this area than this year, we're going to pes water and after we have a few pit at this thing I think that you and well provide further contribution on the suicide of human but nothing deal foam the Utica huh.
One more point I would like to at this though even though to a pandemic situation to bring some of the negative impact on the online do things I mean, you, but we have you seen during this quarter, though I still having a 2% quanta to possible you know well known move out Lucy I mean, you. So we're doing Peter.
Good and we're also expecting a better recovery optimism has them a situation well under control in Chinese in China.
Understood. Thank you.
Thank you.
Our next question wall compounds on X. I'm hopeful. Please go ahead.
Okay, great. Thanks for taking my question on the social Entertainment side, obviously that make you growth is it's very strong despite the cover 19 impact.
And and paid user growth is well wonder if you're seeing any signs of ARPU stabilizing at all through may as things have gotten a little bit more normal and on the.
On the Kubow chunk home I'm curious what this strategy is there a separate apps versus integrated Apple approach and how you think subscription and overall monetization for the long form content on the spoken word side might differ from music adds you you know take the strategy of separating it out.
Okay.
Absolutely questions and well be talking about the social entertainment I mean, you. Yes, we are having a really good results this year, especially during the pandemic situations more people spending more time at home and they need still in forms of entertainment. So we are seeing around positive we felt that how active users being more active and even.
Some often less active users you have to say dot com and stop at the same Carl T. and do something that working with their friends at home seemed at the overall it Oh uses behavior as you see actually is changing but even though off to the pending make situations people starts getting back to the long life.
We see watch you hope that our overall that he's actually supernus off I'll use was we will remain a you know.
Well, it's a pretty good.
Level and turn PCC in they're coming months, what you're thinking about you. So right now since the two independent with situation, even though it helps our total active users, but they'll be assuming that you do have some impact on data revenues high absolutely impact of global through afternoon, because first of all somehow.
Our size for cost goes we are not being beyond maybe being corn team to all the speed at home. So it impacted total nimble on at a time I'm doing depend time period and also dependent make who is also brings on a that could impact to the overall economy. So maybe I'll a number of uses Uh huh.
Intentionally for spending on so lots of broadcasting services with the impact is a small but after dependent.
During the period, we are seeing that Oh, we actually experience I'll be covering right. Now. So we are expecting to seeing that diversity to the west and you will continue in the healthy growth and also the opposite you mentioned Oh do also be and put this fall.
And so on in terms of Coutaz Whos, a starting from this quarter or we have started to include the kubow telecom or data into out and they you and the data that you see now reporting <unk> reported falling have been adjusted retrospectively so that they.
They are apples to apples comparison.
And as you can see a cool Charles how despite the very early stage saw phenomenal growth going from 1 million and they you last year to by over 800% to about 99 million or it may you this quarter.
And the strategy there is that team. He has a very good track record of executing on multi brand product strategy to more effectively covered different user segments.
And could go to monetize a perfect is another a perfect example.
Similar to almost multi brand a product strategy that we follow on on online music.
And that's because Coolidge hotel allow us to better serve specifically they use the demographics that I'm more closely aligned with Google or Google music, or then a that leasing and how our acute care.
So overall socially you grew very strongly this quarter.
But I like to add that's you know the cheering to covert 19 up and then it gets people tend to stay home and spend time more on karaoke during that period, a and may use and page use it did enjoy a a little bit of a boost during Q1 and so it wouldn't be very norm.
Oh and reasonable that aim in Q2 as users returned to work and they have less time spent.
The l. healthy to see how any you into to normalize back down to a level that is slightly below Q1, and paying users would probably be around a similar level in Q2 as as in Q1, but overall from a revenue perspective, we do expect as I should mention we do expect out Q2, a year over year revenue grow far.
So shouldn't payment revenue to be stronger in Q1, <unk> and also you you also mentioned about the long form all deals tragic east the cool Tom team, perhaps better yeah, well just launched I would like to at least would be more comment on that this because that's a whole you're seeing that long form on the always a strategic area that we wanted to people listening on.
Well first of all the cost.
Our users we have a strong user base the I get used to treat listening to music and enjoyed all ought to be lead to content all powerful we'd be very natural for them to spend more time to listen to some on doable long form with your comments, we'd have to to try though in six months ago, and we have achieved a gradually could be sold and you also laid a good thing.
You should enable us to be more encouraged but I started to roll all no I'm not just like a new features all functions on our music platform, but we try to launch Oh independence.
All of them onto apps as well, which is of course on team. There was always I'm used to even though we just want to do at the end of April left in the month, but do you have already be seems a very good feedback about uses of you're fine tuning our Paulo and at the same time. Besides the once you know the new applications. You also rolling welcome all Alan.
New monthly subscription pen with marketing promotions and really good price pack and I think he also encouraged them. Okay. Then I'll, let me spend very possibly put back. So we would like to show would be more into future. Once we got any more updates and columns and locomotive strategies.
Great. Thank you.
Our next question today, well come from Benny Wong of HSBC. Please go ahead.
Hi, Good morning, Good morning management. Thank you for taking my questions. On my first question is that understand the company exploring how many new initiative you opportunities and then also like that the accounting and also D. I PNG life talking like the UGC content UGC content.
How do you see our does have a pack I like our monetization plants in terms or like how you plan to monetize this new opportunities and what do you see any cannibalization to our existing app users in all following up on this question is.
What do you think that well be because well be stepping up our selling and marketing or maybe part of its all I'm an expense. This year with well just mean you should just be on launching a how would that impact our margin.
Then just yet please thank you.
Okay.
Well confessions, we are always focusing on trying to encourage besides the professional content.
We also encouraging our uses to create more usage and read the content and show with their friends and I'll Pratfall. Let me give an example, we just launched a new worship <unk> leasing, which is worse than 7.0 or just a couple weeks ago.
The major focus off this worsened needs we are more focusing on there will be utilizations of the apps, so which means that in the past when people who is using the reason that signal a song.
We call it which is I mean, all you'll fall imagine. It then we shared below 12 friend, but might not be sizing. These he also encouraging all uses to create redo based content. So if I were wonderful.
Powerful tool that we created a lot the entry barrier alpha uses to create content and he's living easy for them to pick up that home a softball music videos. So this is what we're doing and we have you feel very good b cells and you're seeing that many people started to create content and once this kinda content was being displayed.
Due to users, especially the I phone a friend you'd be keeping a light or you'd be watching your consuming the content and eat you encourage the interaction among dollar uses which have to social networking effect. So this is very important direction that would be a working on and so that's the reason why I'm talking about real world.
Came on the video and I solutions, Oh applications. So food this kind of fall that these fine.
Encouraged the interruption.
Among the uses and uses can also sending which will give or maybe if he's going to be appeal else I know the cellphone videos and you can also for little bit life, all come off the scale out and then kind of have monetization.
My fault.
Audits you create a virtuous cycle. So this is something that we are working on no further questions I think that you're not going to jeopardize our professional content because we understand that all uses two housekeeping. These people wouldn't be national content, but at the same time. They also need to calling in from their friends and this is also the beauty of T.N.V., we options in that way.
Not just a platform based district using professional contract.
Okay.
Thank you thank you Christian.
Oh, sorry.
<unk>.
Yeah, I will answer the question too yes.
About emerging.
At the gross margin level, we think we go back to the gross margin will be stable in this will be stable in the yeah around that end up to one yeah because.
You won a with a cop hobbies and 19 pride that make a recovery.
Almost a gross margin about Oh, Oh, the beyond these will be increased not to Oh, we needed to master.
Now I am not ours destructive is to focus on we actually so Doug content it needed to match. So Oh wait I, just look wasn't I cannot be stable, yeah and about operational.
Operation on that NAC marketing.
We think a I'll meal come a well management, our promotion fees I want a manager <unk> Maki basis. So we think our dot Oh God right. There. They show up for these expense to revenue will be.
Around at the same rate at a Q1, and we a box or the music or the me speaking capacity is because we needed to you last the moon knew what package and the new technology. So we will you must more R&D <unk> and employee costs. So oh.
No that <unk> will increase so.
The Bakken batches are not come knocking novel, I'll, Oh, well not not marching they'll be on beat would be crazy I compared to the Q1 and a around reasonable level they see it.
Okay. Thank you. Thank you can essentially very helpful. Here. Thank you.
Thank you.
Our next question will come from Alex Yao of JP Morgan. Please go ahead.
Oh, Thank you management for taking my question I have a two questions. A winds are regarding the introduction of old your book functions into the product portfolio, usually lead the industry. So use audiobook engagement driver and then monetize that engagement and the usage.
From audiobooks off there a lot of streaming business does does audiobooks or all the same goal in your put a whole portfolio our needs a more of an engagement driver and less often monetization glover.
Secondly, regarding the social entertainment or the revenue gross rate snow down to 3%, which you guys attributed to the outbreak off a coffee my team. So my question is or what does it take hold the revenue growth rate you're a recovered searching seems much twentys ensure into next a couple of quarters.
Vincent just because of the coping my team doesn't mean, you got done done need to doing anything wants to impact a fall on the corporate nice gains over the business. All bets are normal girls trends or do you need to do something too.
Maybe changed the way that consumer behaves as opposed to the coping lighting all Blake.
A relevant questions I'll tell you should we see a user behavior.
And often social entertainment business in April versus February and March. Thank you.
I'll address the second part of question on social Tame the entertainment again for Kraft surely can talk a little bit more about the audio books segment afterward, So look Walt social entertainment revenue grew only a 3% year over year, primarily as a result of coal that Oh, we strongly believe.
Leave the worst is behind us.
And we do expect to growth rate, we recover a in Q2 and so like we said we expect we expect the Q2 a year over year growth rate for revenues to be stronger than Q1.
And most of that is driven by just organic growth or you know of users paying users being more willing to to send a virtual gift a you know with the economy reopening back up and ER and the constant supply reopening back up given what are you know kind of caution.
I mentioned earlier, having some of our lot screening outperformance being back to work a on a more normal level in in Q2, and so most of the growth is just going to be driven by organically from our to go live cool alive and to some extent are we saying as well like like we mentioned.
Oh, we do think our social entertainment business remain healthy and solid.
But it doesn't stop us from continuing to broaden and expand our social and the team is entertainment business beyond that to include the launch of keeping music streaming.
I just want to Oh, just be clear that we plan to launch the cooking music last remain a service in June right in June.
And D. A will continue to expand the live streaming content category or that I talked a little bit about into a gaming and the likes of AC GE or other categories such as matchmaking.
And in fact that has been tremendous we've made tremendous progress or you know in April by announcing the strategic cooperation with Tencent games, allowing could go live to two large cream or all of 10 cents popular games. So all these are initiative both initiatives that would help us drive further.
Growth beyond our organic growth.
More bad will probably shine through in the numbers to was the second half of next year I'd rather than second quarter.
Hi, Alex Thanks for your questions and let me address the first question do you mentioned about the audio books functions.
You're absolutely right that the audio books function All me Guy I called the long form all deals I used to really a and engagement life, which was because I think as I mentioned that before it's maybe natural for all uses because they listen to music they get used to it on our platform and he's very easy for them to listen to more odd.
The format upon kinda like along from audio who's ready natural put them and when we are going to often these kinds of content and we do help us to increase the time spent about users which has been proven it during the past six month every launch out that cellphones to surface already so I think that this is when a healthy truck I formula.
We even do we have already Carla a huge amount and they you. So we're not relying on this long form all new features to get Additionally, we use is definitely we'll get some but if we can use them to let I'll use it to get more engagement and increased its kind of spend who's going to.
To be though the made a number one off track you said, we would like to achieve so once we got all uses would be more active there's many way for us to do the monetization like I mentioned people be half the monthly subscription VIP pen.
Which is we also a very attractive price <unk> for the moment to encourage people to spend more besides the normal newsprint monthly subscription. We also have to all the cost model that they can also spend on a particular lump them audios content.
Can also drive more advertising revenue in the future small because as everyone else you knowing that I'm on the T. any type on there's a lot of potential Boston fly for the advertising dollars.
Piece I think these we're also seeing that definitely you mentioned, we can also let the tail well who provides a lot from audio content to us to even have some life. All costs. We also showing this two very good I always felt and beat that by the old you base like what cost as well so he's on the QQ music.
As long as on the cool backbone, you're seeing that the trend is coming and this is also another.
Potential areas like if we can even flat for the business development. So there's a menu able us to do the monetization in the long from all your base. So I think I'd be system. The reason why we're so emphasizing that and we'll continue to be more resources in this area.
And this is a new.
My position ways, we Oh, we think we need to time to training the I used to us. So we back to the meaningful revenue will be coming from next year.
That's all.
As a reminder, we ask questions. Please limit themselves to one question. They have additional questions. Please reenter the queue.
Our next question is from Alex Brown of Morgan Stanley. Please go ahead.
Hi management. Thank you for taking my questions did you touch on overall gross margin of the company going to be stable, a if I want to split between the music services and the social entertainment margin, how would that shouldn't be look like and for music margin.
Understand that the.
Must agreement with one of the top three labels east expiring or can you give us some update about that and what are you hoping to achieve from that negotiation and how would that impact your cost structure cost structure and also a wheel that new agreements have an implication.
On other domestic labels are the music labels.
Cost structure and future. Thank you very much.
Sure Chris how are just a question about the the licensing and then surely can address the question about the margin going forward.
Look we Oh, we are in the middle of the negotiation with one of the than three major and like we said in the past.
Yeah, I'll focus is on getting to an outcome, where it's no longer going to be a master license it will be a nonexclusive arrangement.
And Ah in terms of the cost structure in the past. The obviously the is primarily a a fixed cost minimum guarantee driven cost structure or what we striving to was is ensuring that the components of the cost Oh, Oh revenue share base.
A more than in the previous contract and the components off their contract at a fixed cost base in terms of the mg or less compared to the lost contracts. So overall that would.
Be a an improvement compared to where we were previously.
And in the long run a you know we believe that obviously you know from an absolute dollar perspective, you know if you. It if you look at the licensing costs. It is fair that it should go up overtime, but you know relative to the growth rate off our music or revenue growth for music subscription.
Revenue growth.
We're confident that we'll be able to see operating leverage kicking in a in a in a music a business. Despite a b C or that the growth in the licensing cost I also want to remind everybody that I know, there's a lot of focused on l. made three majors, but.
The biggest five labels accounted for only less than 30% of our streaming volume on that platform.
It's actually even less than that now I'm. So we have a very diversified settle content supplies.
And then which is very very different than in the west and importantly, or you know we are we're investing at a very committed to building a independent a musician ecosystem that tencent musician black or because ER and get a you you could.
See the result, coming through as Christian mentioned with the number so being up loaded on a number of people signing up to the platform doubling.
And you know and an increasingly or even some of that those costs end up being licensed to us. So it depends a musician platform Oh, and then exclusive basis to us that's growing even faster. So overall I think we and we're helping many of these independent a musician grow a very far.
Yes, and promote it's all very successfully as the examples that Kushan talked about so overall I think our content portfolio would be very broad and comprehensive.
It will have the top label such as the three major and we'll continue to be part of choice there and we're confident that we'll be able to get to a and outcome that is that is reasonable and profitable far for both parties, but at the same time, we also very working very closely and investing heavily abroad.
Turning now content ecosystem to include all these in India musicians as well, which is very good for us in the long in the longer.
[laughter] gross margin on that music, we backed up the goes much will be improving in long run back on bad Huh.
Our two reasons, one or at least the woman to monetization ways onto got my music. Aside is at the very early stage right back I will revenue music, we will be Oh increased rapidly <unk>, including Uh huh.
<unk> revenue was digital sales and the with typing revenues. So this isn't a London, England, Oh, we will many the cost like that.
We hope make an a mall how small part of the cost that will be Romney. She only now and reduced at a minimum gone too much I think they need a pot M. A it's a long I stated, it's a it's a meta palm too I too.
Good to go so we believe that's there wasn't much on them use could well be at inquiries into my mom and pop into social content gross margin.
Now I wouldnt be <unk> done next the called Todd or they possibly will be a recovery I, because I don't make up it'll be Oh <unk>.
But oh.
Mr. He ratio will be a little enquiries on that music or not I'm, sorry, I'm kinda, okay. So that will be a little increasing cost marketing and especially on time and I won't walk compared to Q1.
The gross margin will be quite yet.
Okay.
Our next question will come from one day 10 of Goldman Sachs. Please go ahead.
Oh, hi, Thanks, nice for taking my question.
At the time on the music industry with Nike rather subsequent to work from home trend as we see the way off here.
I think my parents and some upstream player myself or I missed the locked out I'm just wondering what's the maximum strategy for father, Crimean say monetization post a pandemic award when you're probably looking out to monetize those are my concerts premium product or the Iraqi product. Thanks very much.
Okay, well, essentially who your questions and Oh actually you're absolutely right that doing the opened 19 pandemic appears more people.
Staying home and they consume need at the patent all consuming new cities also different need to pass.
I think that you're seeing positive impact frankly speaking because I'm not just doing it right now, but rather a yield to you before you started to extend it also putting and.
Who pulled fighting music surface, who I own keys, and our though a whole my parents is like the smart TV subtract trial.
These really didn't help us to like a good foundation.
For us to help our uses to enjoy music at any time that anywhere in the convenience. So I think I know we have already laid a good foundation. So doing the corporate 19, even though the pet is often the libel of all users has changed we should be you'll have some negative impact to the overall activity.
Okay. That's helpful users, but we are still doing a peter good talking to quantify the to 1.1 do you wish we still have a quantum quota.
Improvement in total and they use so I think that in the future I understand that people are starting to try to try to on using news at food I will piece or other platforms. I think that you also help these kind of all these activeness to be proceeds into future. So I think this is going to be I'm not a potential.
Ruling how do we get all bus. So we'll continue to have a strong partnerships.
Not just bio's hole, but also with our the Aiotv manufacture those and also on the platform as well we would continue to strengthen all Oh business in this area.
Absolutely monetize stations I think that there's two ways in comes to music I think that you have been continues showing very good encouraging feedback in our rolling off all subscription base, which is a 70% grow which is rectified and I think that DC, so very important for us.
It's proven that the way that we we are doing is is that correct way to go. So I'm right now we have to pay English will have to 6.5% or we are seeing that he is going to continue to grow being a healthy men and the infection. We did wishing to future and then we are going to maybe one day, we kinda cheaply, but a lot higher upping the show which is.
Good how many becoming a the second part and you're also seeing that.
Restocking she will have some kind all online entertainment format, a new form of online entertainment fall uses mandiants being at home. So that's the reason why we roll out the GM you lie program to independently area. We have successfully launched it up five online conferences.
Top tier optus.
Frankly speaking is not are used to work because you're not just letting the top tier boxes to reckless song that their home and then just seem pretty just.
Oh for CACI, Bolivia, arranging online concepts, which is around one of the know how well our fooling contests. This is where we not that easy to a range, but we have already would thats why do you know we're getting a lot of really good fit back on the uses and also the.
Hockey honestly like teaching and also like Randy do they also thinking that he's a very positive I'm not just the pharma topic, but also sending all really positive messages to society that you're sticking together doing the pandemic.
Situations, but I think that applicator and just kind of up experience or we will be called continue to fine tune. Our LTM you live online concerts.
It's not just simply bought cost online you, Ben and let them to become all things when we meet up new format something that is more suitable to the younger generation something because most suitable for the behavior of our on the user. So we're working on that and also in the future will be asking more and more monetization.
Michael.
For this online conscious as well, it's not just for online ticketing, maybe you can kind coach mall, but 50 thing you can encourage more lutein interaction, although the artist and also the audience.
We can arrange offense base, then we kinda rent a lot of fine space I pay cities tooling to online concerts.
He was as well so this many way to call until I I'm still encouraged by even to the coping Nike and it's not the food.
Situations for then high World a many people are suppose but you're also seeing that we can use all these kind, though in new if they keep a ways to who buys them up in new services, which can help all uses to be positive and also have in many ways off entertainment, even they say.
Being at home, so I'm seeing that a lot of new business opportunity out there.
Our next question will come from Thomas Chong of Jefferies. Please go ahead.
Hi, Good morning pain management picking my question Ive a question.
But.
And weapon.
Kocsis occupant affects that.
Having more and in our souls ecosystem alter your comments about how weve gone.
<unk>.
Competition, we are the p. it into future and Oh, we think about our revenue.
Oh, the bought cockpit given that thinking about the GP margin to be relatively stable on a year on year <unk>.
Yes. Thank you.
Okay I'll take the competition question look I talked a lot about a video enrichment across a number of I have a music as well those are we saying.
And we we're not trying to become the short video platform. Let me just be clear what we're trying to do is enrich the video content format. So that we can better serve the user needs because users. They want it can sheet music. They also have a desire to consume video.
We are content are related to music.
And in in the past, we haven't been able to fulfill that need but Ah Ah going forward, we want to enrich the concept of video content categories. So that we could actually fulfill their need and thereby increasing engagement and time spent on the platform. In addition to that I would say.
You know in terms of video is not just short video for example, Oh, we have a show like I'd like to many a variety show called Mr. radio on Q can make.
It is now a into do we just finished the second season.
Highly successful show you know since the total stream for the two seasons combined it's almost 600 million streams and that's you know on our platform right. There's a lot stream externally by by video based platform and we had attracted like that's basically.
Oh Radio talk show type a show, but it's a video content and those two seasons attracted over 100 groups of artists right and Oh actually that's on season, two alone, which is 70% higher than season, one and we promote and like hundreds and hundreds of.
Those are through that and there's a lot of a very good positive user feedback on that so that's another form of video enrichment on our platform that is not just short video, but those are sort of 20 minutes inline and then at the same time, we also broadening so when I talk a little bit about.
PGC, we also broadening our UGC. So in Kugel music asked for example in the music streaming page increasingly you'll be able to see while you're listening to a song the system will all the general automatically recommended a background video.
Background short video for you to can shoot and those video somewhat that are part of the whole slate of variety shows that we have either invested in or we participated we have we have some of the a partner labels participated in so we have access to those content some are purely UGC.
Provided oh, so I think we're trying to it but all of that are music centric. So again it all comes back to enriching our engagement and time spent by allow uses he can share music centric video on the platform and so they don't have to leave a platform to.
Go to an excellent new platform for for this or got outside of music a century content, that's something for a and they started talking to do.
Our next question will come from L.A. Zhang of Macquarie. Please go ahead.
Oh, Thank you management for taking my question Oh, Okay, Matt.
So how do we think about the balance between.
User growth are poor under the current social effect not a if we look the on second half.
Gradually recovering from corporate Nike analyzing all the metrics how their new features like gain thank you could actually what impact our put your longer term. Thank you.
Sure. So I think it's it's important to recap you know that the Q1 metrics because that its important to understand that too to understand the future. I mean, we saw the paying user increase and the ARPU or slightly decrease on a year over year basis and that's type.
Merely because of the cobot a impact or you know we saw a you know an increase in time spent on online cardiokey, a which drove a at the end may you and drove the paying users. However, many of these are paying users tends to be lower ARPU right compared to the live streaming.
And use that as a result, obviously track down or the overall opera and at the same time the live streaming paying users who are economically impacted by Ur Cobot also has a less willingness to spend and so we have a those two impact and then going into.
You know next quarter and beyond obviously with a three Connie economy reopening.
You know, we got it and people returning to work from the all like her oki perspective, if they used to paying user growth will be obviously as high a into to it and it is in Q1. So from a total paying user perspective, it probably be at a similar absolute level or maybe just a little bit of growth compared to.
You want but that's completely normal if we're talking about one quarter, obviously will grow up beyond that.
From from Q3, a into Q4 and for monopoly perspective, with the reopening of with you reopening of the economy and tend to live streaming paying users returning.
You know the ARPU would obviously increase sequentially compared to Q1.
So I think we see that trend continuing a which as you know very healthy tread and also I I want to stress that you know the actually you would also normalize a little bit in Q2, following a that Ah that would be at a low that would be.
At a level that would be slightly below our Q1, but again, there will be completely normal because of off the coast impact that boosted the car oaky and May you in Q1, it will still be at a very healthy and strong level.
Our next question what color can find Anglo okay. There. Please go ahead.
Oh, Thanks management for taking my question I have just one question.
Well, it's great to see continued acceleration music stops revenue in past few quarters. So how sustainable this round off strong traction, especially considering that soaps addition, how the slight deceleration in one queue. Thank you.
Yeah, I'm I'll take that I think in Q1, obviously I talked about you know the impact of codes that are on music I may you and as a result paying users as well because you know when users spend an unusually large amount of time it oh, they tend to consume more.
In terms of karaoke online games online videos right, but despite that right we were able to grow subscription revenue.
At 70% year over year basis, which is actually how fast this would be reported growth and so going forward or into Q2 with the real reopening a kicking in we actually expect our Q2.
Year over year growth rate for our overall online music revenue to be even stronger than kilowatt right and that's again going to be driven by subscription revenue continued to continuing to grow at very rapid pace and in terms of that actually talk a little bit about that at a we expect the net adds of out.
Music paying users in Q2 to be higher but in Q1, obviously and hence the music paying user you over your growth rate would also be at a very high level are you gonna similar to that off of Q1.
And from an ARPU perspective, you know, we Oh, it's well, let me touch a little bit on music ARPU because in in the what we see a it's very it's off a very strong growth on a year over year basis in terms or ARPU is a result, all many previous quarters of investment that we've made like glass.
Yes right.
And in in the form of for example, a a promotional efforts around auto renewal subscription plans now you know the impact of those older with new subscription plan is that we provide a first month discount if it used to sign up so that you know they a a check or the auto.
Renewal option, but then after the first month discount irrationally Ah goes back to the normal pricing. So it has an impact of slightly decreasing fish the near term ARPU, but increasing the long term up now Oh, we have we enjoy the benefit of those promotional or.
Assets.
A few quarters ago, now and I like we said you know get a in the past we're still at a very early stage of monetization with only six and a half for said about paying user so.
If we could grow our subscribers more by keeping I'm ARPU flat, we would prioritize on a subscriber growth over ARPU. So I wouldn't be surprised if in the next quarter or two we see a more flattish sequential ARPU, but still growing on a year over year basis if that.
Happens, that's basically spending again, a promotional efforts to invest in built in growing long term up.
And that's actually a very good thing or you know for a first step that.
A a that we'll see yeah, one more point that I would like to add which is to the retention rates of our monthly subscription Ah. Yes can continue rolling so while we are seeing that'd be a you know really help humana and.
Once the retention ladies continue to improve.
Further help us its life, all our pain, we show as well.
Thank you.
Our next question.
Thank you Sir our next question will come from T. on how a T.H. capital. Please go ahead.
Hi, Good morning management, Thanks picking up for the question. So Ah Ah I have a question.
Jim you like broadcast that can you live Tim you like so I know I seem to come true I actually my team watch the old <unk> concert tour I feel pretty excited about your business since youre actually that pops at what existing like a light.
Like a night broadcasting or music services and entered into a new watch it territory, but if a music area. So I wonder if that's your ongoing plan. If you have a ongoing pipeline for that and also how to monetize it each contract you can have like a.
Uh huh.
Use of Oh audience or meetings of audience I think if you don't monetize it. It's really we started the sources I couldn't matching 10 cents.
We'll have a lots of those kinds of appetite advertisement requirement or resources. If they can actually I you know what puts some aim it you can't actually monetize the quick you know in a great deal. So I want to whats the strategy going forward, if there's a pipeline how do you monetize it. Thank you.
Okay. Yeah. Thank you. So most of all the questions and we also pick something up out the PM July activity said be organizing for the moment and does yeah, you're you're absolutely right that I'm not just providing a music surface food the mobile apps, but we have already extended all for Queens, and we'll be able to be will total.
Music Entertainment ecosystem, which means that we need to.
Go upstream and also downstream as well and I think the TNT like you and we do demonstrating that we are putting a lot of I suppose and also creating a wonderful new experience. All uses formed a performance area I think people to Tim you live events that we all the nice thing first of all.
There's many things for us to learn I'm, just not simply making a hong offline concert and tie back to report cost it and maybe longer in concert.
I think that we can have many new format, which is also.
Some of the string of TMB like the socializing, Okay. How we can let our uses when they are enjoying the online concert and they can also socializing with each other so.
So defense Basi, calling the weekend actually kick in we kinda loss off we can do a lot of thing for example, if you like a defense off to Jalene, Okay, maybe be <unk> before the concerts who's going to stop you can getting walking some voting on this phone with that feed to me is going to perform for their own concert.
And also doing online concerts, you can also have a lot of interactions as well.
You can have many kind of tracking or sending work to do thing I'm too old to Yong, we love to idols. All maybe you can be kinda wring some offer some some came in filings.
Ways for our users who enjoy the online conscious as well. So all this happens to be demonetization methods to retain a putting in so I think this I mentioned to the five top tier artist clones to online clearly we are into independently situations is really a good.
Stock for Us and we learned a lot of experiments, we accumulate anymore experience and we are fine tuning our business model and the most encouraging.
You southeast not just our users really like this concept, but also the artist also food and he's a lot of potential and they also want to go with T M and Orange more online concept you new form at all nine closer to getting to future. So I think as I mentioned the people we are truly the but.
Does not just by the moves label.
But also the people that upon those bio artist because we are growing up together.
We will fall bashing industries, and we work I'll pass the music and better music speaks volumes.
So that's the way for us to go and do continue to explore and I'm definitely seems like Tim you live and this kind off folman space activities or we would have good good hand to a welcome all positive we sold into future.
Thank you.
Thank you both my next question.
Thank you.
Our next question from Alex.
China Ryan. Please go ahead.
Oh, Thanks for taking my question I have one question given the user demographic is different to train future isn't it kind of cool.
How about the management of which Oh QQ music lives framing.
Different from the current Kupol live streaming.
In terms of product design council vertical and usurping patter. Thank you.
Sure.
I think we'll be able to talk a lot more about it or you know without giving too much away a until we've launched a service that broadly speaking what we try to achieve like like we said is continuation of the multi brand a product strategy.
Across music that you saw we have multi brand across karaoke that you see that we has embarked upon the incubation of Google Alitalia and also in live streaming or multi brand and I think each brand and each part out we'll have slightly different targets of user sackman needless to say.
I think out or live streaming business within two to music or would be more complementary to the user segment for could give music. It would have oh, no you'll have more focus on independent musicians, which country music is working very closely with.
And what you had a more features a too.
Work with these musicians to promote the music wildlife and interactive matter.
And all of this is very complementary like we saw in music you know with multi product doesn't cannibalize a it actually help us broaden our reach ER and help but better cover or the entire population in China, China is very big with their friends different segment. So through this multi.
Brandon multi product strategy, we can actually extend our existing business into a more and more data user segment, and thereby broadening our revenue growth potential.
And also the the EUSA overlapping.
Among QQ, new set and COO say is also very minimal. Okay. So that's the reason why I think that when we're going to roll out the life for concept this onto moosa platform, which we will help us to serve our uses better too. So if the kids gummies are usually bankers and he is not doing to kind of rising the Google or music like Uh huh.
At this as well.
Thank you.
Thanks, Hi.
Our next question will come from having a chunk of Keybanc. Please go ahead.
Hi, Good morning. Thank you for taking my question. So after a quick couple of question Oh. The first one just following up the could you maybe like screaming question.
Oh I'm just wonder.
What's our initial thoughts the potential.
And we'll a gradual user the scale and that and then paying user holiday selling is that going to be similar to what are we have now for.
The cool Muses labs remain and.
Oh and or could be even the bigger or there and then second question would be.
Yes.
Still regarding needs are and then business just wonder.
Can management team just be labor anymore.
The progress of a recovery.
I I think I think you guys mentioned, there's some recovery.
Its quarter and then what's the trajectory saying.
In the end of March and April or into the early may what do we see do you like.
Over your growth.
Trajectory I mean overtime here and then what's the what do we expect the or the revenue run rate unable to be.
To add to watch label compared to their tweak will be 19 label. Thank you.
Okay look I think obviously you know by us with all the I'm not subject to all the disclaimer relating to forward looking statement.
By virtue of us, saying that we expect the second quarter ER revenue grow for especially entertainment to be stronger in Q1, Oh, we're seeing this because we're already seeing.
Recovery a in the numbers a in April and parse it may that we're in so isn't it's a it's in light the reality of what we're seeing happenings in line, we what we say.
And then in terms of thought you know the addressable market look I think live streaming is a multi hundreds of millions or billions multi hundreds of billions in renminbi times in market size right I mean live streaming business is huge.
And I think we have obviously, a very strong foothold in the music centric live streaming Oh, we are ready in no nobody is in this space.
And this is still just a small percentage of the overall live streaming pile.
We actually think we could continue to grow that are a pie of music centric live streaming.
You know alongside the over the growth of the overall live streaming which is which is enormous.
Market as to whether it could one day reached the size of of could go live Oh, you know I think it will be not not in the near term I think it's fair to say, but given a cool go life has done this for many many years it would take many years for for US to two reached a level, but I think the potential is definitely there.
<unk>.
So look I think you know I think that's the last question overall, it's just to close things out.
Yeah, like we said I think in terms of online music. You know we were seeing very positive momentum continuing we expect this second quarter revenue growth to be stronger in Q1, driven by continued a continuous rapid growth in subscription revenue yeah in terms of social entertainment.
Revenue. We again are also expect Q2 to be grew faster than Q1, and so combining all of the above all we expect total revenue growth next quarter to be a stronger than 10 kilowatt.
And so let's put the coal that impact behind us and we think the washes over and we have a better results a ahead of us starting to two and into second though.
[laughter].
Okay.
Okay. Thank you everyone. Okay. Thank you. So my name is.
Mhm.
Okay. Thank you.
And ladies and gentlemen, that's well conclude today's conference. We thank you for attempt.
Okay of any further questions. Please feel free to contact panties Investor Relations <unk>.
We look forward to speaking with you again next quarter, Thank you and goodbye.
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