TikTok’s parent company set to launch music streaming service

ByteDance, known for being the parent company to the widely popular app TikTok, has allegedly begun to develop a paid music streaming service as reported by Bloomberg. This idea was in consideration back in early April, when sources informed the South China Morning Post that, with over 100 people working on the service, its launch would not be far away.

There has been a talk of ByteDance launching the service this fall, focusing on emerging markets. Bloomberg reports that the company is mainly aiming at poorer countries where the usage of paid music services isn’t widespread.

From the limited knowledge there is on the app so far, we know that it will offer both free and paid tiers, have a wide catalogue of on-demand songs and videos to choose from, and, as reported by Bloomberg’s source, will be unlike Spotify or Apple Music, two extremely popular paid music services.

Having acquired a massive user base over a brief time period as a result of TikTok’s rising popularity, ByteDance has been exploring a variety of new app ideas, from Lark, a Slack work messaging competitor to Duoshan, a Snapchat clone. This kind of music streaming service would allow the conversion of TikTok users into paying subscribers.



This could be useful to ByteDance as, despite having over 1 billion downloads worldwide, TikTok is still not profitable according to Billboard. Encouraging users to pay at all for music streaming in emerging markets is a mammoth task in itself. Less than one per cent of music streaming subscribers in India pay for that subscription, and about 14 per cent have a bundle subscription (like Amazon Prime or through a mobile contract).

However, having secured right from two of Indias’ biggest labels, T-Series (now Youtube’s biggest channel) and Times Music, it looks like ByteDance is poised to make India the app’s first market, and re-negotiations for licensing deals with the world’s largest music groups (Sony, Universal, Warner) have commenced.

According to an industry source, TikTok is still relying on old licensing deals it obtained by purchasing musical.ly which it acquired at much cheaper rates to mucial.ly is 2016, back when it was still considered a startup. Now, with a rapidly growing audience, TikTok was the fourth most downloaded non-game app of 2018, outdone only by WhatsApp, Facebook Messenger and Facebook.



Bringing the app to India without waiting for catalogues from the major labels is possible but improbable. ByteDance already has the re-negotiation of licensing deals with the majors for TikTok on its’ plate.  Moreover, as reported by Bloomberg, licensing deals for this new paid service will be wholly dependent on coming to an agreement on those catalogues for TikTok. Their disclusion at the launch could rub those labels the wrong way about ongoing negotiations.

Furthermore, talk about ByteDance considering an initial public offering this year has simply given further reason for the company to have all of its music rights sorted out. The industry source reports that ByteDance is focusing on making the transition from startup license to a commercial license, meaning the company will likely have to fork out a lot more in paying to use music.

This story originally appeared on The Verge.