What Western DSPs can learn from Tencent Music’s SVIP Tier

Tencent Music Entertainment (TME) has had a lucrative Q1 2025, with Super VIP (SVIP) subscriptions driving revenue growth. According to the company’s earnings report, music subscription revenue grew 16.6% year-over-year to 4.22 billion RMB ($581 million USD), fuelled by improved monthly ARPPU (which increased 7.5% year-over-year) primarily due to growing SVIP adoption. This helped Tencent Music achieve $1.01 billion USD (7.36 billion RMB) in total revenue for Q1, despite a decrease in social entertainment revenue.

It is a model many Western labels are trying to emulate. According to MIDiA's streaming pricing strategy report, nearly three-quarters of surveyed consumers in the US who subscribe to streaming or are on a shared plan are interested in a “Super Premium” streaming tier, and nearly one-fifth of current subscribers would be willing to pay $5.99 for it. Tencent Music’s unique position as the dominant provider in a large subscriber market with relatively little competition makes it difficult for other platforms to replicate that success in their own markets. Yet there is plenty that Western DSPs can learn from TME’s approach to music streaming and super premium.

TME’s market dominance is unique

TME operates three music streaming services – QQ Music, Kugou Music, and Kuwo Music – as well as two karaoke apps (WeSing and Kugou Changchang) and two music livestreaming platforms (Kugou Live and Kuwo Live). With little to no competition from Western music streaming platforms (Apple Music is the only Western DSP operating in China), TME commanded over 60% of the music subscriber market share in China in 2024. This, combined with China’s position as the largest music subscriber market globally, gave TME the second-largest global music subscriber market share in 2024, beaten only by Spotify (source: MIDiA Research Music Subscriber Market Share Model 03/25).

TME’s SVIP tier, available on all its streaming platforms, costs up to 25 RMB a month, a little over three times the cost of its basic premium subscription. SVIP subscribers unlock features like premium audio quality, special badges, early access to merch and live events, and artist meet-and-greet opportunities. Despite the relatively high price, SVIP is a popular choice among TME platform users, with over 10 million subscribers as of September 2024. While Spotify is the biggest streaming service both in terms of global market share and subscriber growth, it faces competition in more fragmented Western markets. As such, there will be tougher competition for super premium / SVIP tier adoption because music streaming subscribers are split among a variety of popular DSPs, each potentially offering their own SVIP tiers. However, a differentiated super premium strategy, especially one focused on growing social interaction on-platform, would spell success for music streaming platforms, even in a time of growing fragmentation.

Social is one way for Western DSPs to differentiate

TME uses its music streaming platforms to fuel not just passive listening, but also active participation among users and music fans. In TME's investor presentation this month, the company described its platform model as a way to “listen, watch, sing, and play”, giving users the opportunity to connect with each other and their favourite artists along with standard streaming features. This allows its apps to function as both listening and fan engagement platforms. TME’s ownership of multiple fandom revenue streams helps boost this as well. The company has a stake in the live event space with TME Live, in addition to producing new content with in-house studios. This ownership strategy is especially difficult for Western DSPs to adopt. The saturated Western live market – not to mention the current legal controversy with industry giant Live Nation (outlined by Music Business Worldwide) – makes it unlikely that Western streaming platforms will build their own live event infrastructure.

However, a Western DSP could differentiate their superfan tier from the competition by emulating TME’s social functionality and emphasis on connections between users. Thus far, none of the major streaming platforms – Spotify, Amazon Music, Apple Music – offer robust social features, like profile page customisation or the ability to message other users. Spotify appears to be moving in a more social direction with its new “create” tab for playlist-building, but perhaps features like these should be made exclusive to super premium members. In a market where all the streaming platforms are looking to develop similar super premium offerings, the first DSP to go social would have an advantage. From the first rollout, it is imperative that Supremium tiers offer a wealth of features that users actually want. A program with high cost but low reward, even if it is only the beta version, will lose the trust of both early adopters and potential future Supremium subscribers. However, with a strong focus on social engagement and fandom tools, Western DSPs can create their own equally successful SVIP programs.