Byte Dance, the Beijing based owner of the TikTok application and one of the world’s most valuable start-ups valued at $75 billion has decided to develop a paid streaming service after its successful run with Musical.ly.
Their aim is to spread across the markets in which, Spotify and Apple are present, according to a report released by Bloomberg.
TikTok is not wasting any time, as they have already secured licenses from large Indian music labels like T-series and Times Music. We are yet to see if they also cut deals with Sony, Universal, and Warner.
The new app will be separate from TikTok, but sources say that the app will tap into the database of Tiktok followers to garner paying customers. The app is said to include a catalog of songs available on-demand in addition to the video which is not like Spotify and Apple Music.
These days, paid services have become a strong source of revenue for the global record industry. However, markets like Asia, the Middle East, and Africa only account for a 10% customer base for Spotify. According to Bloomberg, this streaming service is going to strive for less dependence on advertising and still prove to be successful in emerging markets.
Spotify’s most recent launch was in India which faced many hiccups as the streaming service had to compete against an already saturated streaming marketplace, with services like Gaana, Saavn and Apple Music in the market. They also launched with a monthly subscription of less than $2, which is a huge gap from their subscription price of $9 which it charges in the rest of the world.
It is going to interesting to see how TikTok’s streaming app challenges Apple and Spotify as they are already geared to take over emerging markets like Asia and Africa which will lead to high profitability according to their projections.
Spotify’s Daniel Ek has also spoken of potential in markets that have not yet embraced streaming in its entirety. With all these streaming services geared to take over the emerging markets, do you think Byte Dance will be able to break the market with its streaming service?