Financial news

ByteDance to take on rivals with music streaming launch

By  | 

Via Financial Times

The Chinese company behind the popular video app TikTok is set to go head-to-head with the likes of Spotify and Apple in the music streaming market with the launch of its own rival service.

ByteDance is in talks with the world’s largest record companies — Universal Music, Sony Music and Warner Music — for global licensing deals to include their songs on its new music subscription service, according to people familiar with the matter.

The Beijing-based technology company aims to launch as soon as next month, initially in emerging markets such as India, Indonesia and Brazil, before a future opening in the US, according to people briefed on the plans. 

The move would see ByteDance, valued by Japanese investment group SoftBank at $75bn last year, battle directly with industry leaders Spotify, Tencent and Apple in the market for paid music.

The Chinese group aims to differentiate itself from rivals by focusing on the user-generated content that has quickly made TikTok one of the world’s most popular social media platforms.

The app allows people to post and watch short video clips; content often veers towards silly comedy sketches and dance “challenges” to various trending songs. TikTok claims more than 1bn users, which makes it more popular than better known social media platforms Snapchat or Twitter.

Music executives are keen to make money from TikTok, which is free to use. They view a new ByteDance app as a welcome addition to the music streaming market, where a number of companies, including Apple, Spotify and Amazon, offer a similar catalogue of songs. 

READ ALSO  Hong Kong sees biggest protests since democrats' election victory

ByteDance is looking to go public as soon as the first quarter of next year, the FT reported this month. However, it has come under fire in Washington as lawmakers fear that apps such as TikTok could send American users’ data back to China. 

In addition to on-demand music, the planned ByteDance streaming app would include a library of short video clips that listeners could search through and synch to songs as they listen, according to music executives who received demos of the service. Users could send these clips to their friends, as the app aims to encourage sharing and virality, and is designed for mobile phones with vertical-sized videos.

Bytedance’s music app has not been named yet and pricing remains unclear, although it is expected to cost less than the $10 a month charged by Spotify, Apple and others in the US. 

TikTok declined to comment. 

While paying for music subscriptions has become common in the US and parts of Europe, it is less so in Asia, presenting a challenge to ByteDance. Tencent has a strong grip on the Chinese music market, claiming 800m users, but fewer than 5 per cent of those customers pay for it.

Print Friendly, PDF & Email

Hold dit netværk orienteret