(Reuters) – China’s Tencent Music Entertainment Group surpassed quarterly revenue estimates on Monday as a slate of original content and pandemic-driven lockdowns helped its Spotify-like music streaming platform attract more paying users.

The company’s U.S. shares rose 3% in extended trading after it said online music paying users jumped by a quarter to 82.7 million amid a lack of social events due to strict stay-at-home orders in China. Music subscription revenue rose 18%.

The company also benefited from a push for original content, including a partnership with Tencent Holdings to produce songs from popular game titles.

However, there were signs that stiff competition and an economic slowdown sparked by Beijing’s zero-COVID policy were weighing on Tencent Music’s business.

Revenue fell 20% in the social entertainment business – the company’s biggest revenue driver and home to its karaoke app WeSing and live concert platform Kuwo Music.

Tencent Music said it plans to prop up growth in the unit by adding features such as audio live streaming.

The company has been in the crosshairs of regulators and was last year forced to end its exclusive contracts with big music labels, eroding its advantage against rivals such as Cloud Music and Bytedance-owned short-video sharing platform Douyin.

Total revenue was 6.91 billion yuan ($1.02 billion) in the second quarter ended June 30, compared with the 6.62 billion yuan expected by analysts, according to Refinitiv IBES data.

Excluding items, the company earned 0.63 yuan per American depository share (ADS), above estimates of 0.56 yuan per ADS.

($1 = 6.7715 Chinese yuan renminbi)

(Reporting by Tiyashi Datta in Bengaluru; Editing by Aditya Soni)