Tencent Music Entertainment reported a slight decline in quarterly revenue on Tuesday, with a 1.7% drop to 7.16 billion yuan ($999 million) for the three months ending June 30. Although this marked the fourth consecutive quarterly decline, the company’s performance surpassed analysts’ expectations, which had forecasted revenue of 7.14 billion yuan, according to LSEG data.

The positive surprise was largely driven by a 27.7% increase in revenue from Tencent Music’s online music business. The number of paying subscribers rose by 17.7% to 117 million, bolstered by successful targeted promotions through telecom companies, e-commerce platforms, and video services.

However, Tencent Music’s social entertainment segment, which includes live-streaming services, faced significant challenges. Revenue in this segment plummeted by 42.8% as the company continued to feel the impact of Beijing’s regulatory crackdown on live-streaming, part of a broader effort to control online gambling activities. In response, Tencent Music discontinued several live-streaming features, attempting to navigate the stringent regulations.

The company’s U.S.-listed shares dropped by 7.8% in premarket trading following the report, reflecting investor concerns over the ongoing regulatory pressures and their impact on Tencent Music’s overall business.

(Adapted from USNews.com)