ByteDance Prepares to Enter the Streaming Race
ByteDance, the parent company of social video app TikTok, is in talks with the major labels to secure global licenses to launch a new streaming service, sources tell Billboard.
ByteDance, the parent company of social video app TikTok, is in talks with the major labels to secure global licenses to launch a new streaming service, sources tell Billboard. The deal, which is being negotiated alongside license renewals for TikTok, will create a new entrant in the music streaming race and give Tencent another challenger in the Chinese market. The music service, which ByteDance has been demoing for a select group of insiders, has been called “a whole new take on streaming” by an industry source who has seen it and will heavily incorporate social networking features, according to sources. ByteDance declined to comment.
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Social networks designed around music haven’t done well — Apple tried and failed twice with Ping and Connect — but ByteDance has a built-in audience of over 1 billion monthly active users across all of its apps; it also has access to a younger demographic than Apple does. ByteDance initially planned to launch the streaming service (which will reportedly feature both free and paid versions) before the end of the year, which could still happen, but as negotiations continue the launch could be pushed back to 2020.
“We’re at a point where the penetration of a lot of these services is [already] reasonably high,” says Russ Crupnick, managing director at market research firm MusicWatch, about the potentially limited audience for ByteDance’s streaming platform in developed markets like the United States and Europe. “The developed world doesn’t need another streaming service for young people, unfortunately. It makes you wonder: What’s the problem that a new streaming service is going to solve?”
TikTok has been operating on discounted major-label licensing deals designed for music startups, which were carried over after ByteDance acquired the video-sharing platform Musical.ly in late 2017. Now the company will have to strike new deals that are more beneficial for the labels if it wants its streaming service to continue featuring content from music’s biggest artists.
If ByteDance can become the fifth global player in the streaming race, though, it will shake up an industry where innovation has largely been pushed aside in favor of incremental improvements. While Spotify, Apple, Amazon and Google all have somewhat distinct features (Discover Weekly, Beats 1, Alexa and YouTube, respectively), a service with fresh ideas and a potential user base that can rival streaming’s biggest companies could throw a wrench into the market and make innovation a top priority once again.
This article originally appeared in the Aug. 24 issue of Billboard.
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