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CORRECTED-UPDATE 2-Tencent Music earnings beat estimates on subscriber, ad boost

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(Removes incorrect reference to revenue beating estimates in paragraph 1 and corrects paragraph 7. The error occurred in the previous version too.)

Aug 16 (Reuters) - China's Tencent Music Entertainment Group beat Wall Street expectations for second-quarter profit on Monday as its advertising business rebounded and more people subscribed to its music streaming platform.

Paid subscribers for the company's online music service grew by 41% to 66.2 million, thanks to investments in long-form audio and a refreshed music library expanded by licensing deals with Universal Music Group, Sony Music and other labels.

Tencent Music shares were up 1.2% in extended trading. They have lost half of their market value this year due to Beijing's crackdown on its tech giants and a ruling that barred the company's parent, Tencent Holdings Ltd, from exclusive music copyright agreements.

The company said it expected the decision to have some impact on its operations, without specifying a figure.

Losing exclusive rights means Tencent Music will likely have to redouble efforts to build a more interactive community while facing a challenge from ByteDance that is using Douyin - the Chinese version of TikTok - to promote music backed by sophisticated algorithms.

Tencent Music's social entertainment services business, which includes karaoke platforms where users can live stream concerts, posted a 7.4% rise in revenue to 5.06 billion yuan in the quarter and accounted for most of its revenue.

Total revenue rose by 15.5% to 8.01 billion yuan ($1.24 billion), but missed a Refinitiv IBES estimate of 8.13 billion yuan.

The company earned 0.66 yuan per American depository share on an adjusted basis, more than estimates of 0.62 yuan. ($1 = 6.4742 Chinese yuan renminbi) (Reporting by Eva Mathews in Bengaluru; Editing by Aditya Soni)