According to people familiar with the negotiations, TikTok parent company ByteDance Ltd has begun discussions with music labels about expanding its music-streaming service abroad to compete with industry giants such as Spotify Technology S.A. (NYSE: SPOT).
ByteDance has reportedly been considering expanding its Resso music streaming service, which is presently only available in India, Indonesia, and Brazil, to more than a dozen other nations in recent months. According to the sources who told The Wall Street Journal, the company wants the service to be available globally so that customers may find songs on the short-form video app and then quickly subscribe to music.
However, the US will not be a part of this next phase of expansion just yet.
Long-term plans include eventually integrating the music streaming service into TikTok to serve as a key platform for disseminating music around the world.
The main music-rights holders have licensed their libraries to TikTok in short-term partnerships in order for users to include song snippets in their videos. However, those agreements are on the verge of expiring before new ones are struck, with music executives claiming that ByteDance has been reticent to pay what the labels claim are established market pricing. These licenses are distinct from the type of license required for a full-fledged music-streaming business.
According to ReportLinker, the global music streaming industry is predicted to increase from US$24.09 billion in 2021 to US$27.24 billion in 2022 at a compound annual growth rate (CAGR) of 13.08%. The music streaming industry is predicted to increase at a CAGR of 13.57% to US$45.31 billion in 2026.
Spotify accounts for almost one-third of all music streaming listeners globally, with Apple Music coming in second. Despite the fact that Spotify and Apple Music are not restricted by the Chinese government, Tencent and Netease remain the two most important platforms in China.
This report follows the speculations that Tiktok plans to establish an “international e-commerce fulfillment system” in the US based on the recent LinkedIn job posting it has made.
Information for this briefing was found via The Wall Street Journal and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.