(Reuters) -China's Tencent Music Entertainment reported a smaller than expected fall in quarterly revenue on Tuesday, cushioned by an increase in paying subscribers at its music streaming platforms.

The Tencent Holdings-controlled company said revenue fell 1.7% to 7.16 billion yuan ($999 million) in the three months ended June 30, the fourth straight quarterly drop as it struggles with Beijing's crackdown on live-streaming.

However, that was just ahead of analysts' average forecast of 7.14 billion yuan, according to LSEG data, helped by a 27.7% increase at the company's online music business.

"Revenue from online music services had strong growth, largely offseting the decline in revenues from social entertainment and other services," said Shirley Hu, chief financial officer of Tencent Music, during an earnings call with analysts following the results release.

The number of paying users at the music streaming business rose 17.7% to 117 million, as targeted promotions via telecoms companies as well as e-commerce and video platforms bore fruit.

Quarterly revenue at the company's social entertainment business, which includes live-streaming, dropped 42.8%.

Beijing began a crackdown on live-streaming nearly a year ago as part of a broader effort to regulate online gambling.

According to analysts, live streamers have sometimes colluded with viewers to manipulate popular lucky draws and share prizes.

In response to the regulatory pressures, Tencent Music discontinued several live-streaming features.

During the earnings call, Cussion Pang, executive chairman of Tencent Music, said that the social entertainment business would likely continue to face challenges due to competition, macroeconomic factors and other issues.

However, Pang said the impact of this segment on total revenue would diminish as the company's core online music business continues to grow.

($1 = 7.1701 Chinese yuan renminbi)

(Reporting by Harshita Mary Varghese in Bengaluru, and Yelin Mo in Beijing; Editing by Arun Koyyur, Mark Potter and Susan Fenton)