TikTok is fast becoming the go to social media platform for Asians based in Asia. Instagram and Facebook are struggling to keep a pace with momentum that the video sharing platform is generating and now it seems the TikTok owners ByteDance are now entering the streaming music market!
Earlier this week, a new report revealed that the Big 3 – Warner, Sony, and Universal Music – remain in tense licensing negotiation talks with TikTok’s parent company. With ByteDance now worth $76 billion, all three major labels have pushed for the Chinese conglomerate to pay hundreds of millions of dollars in ‘guaranteed money.’
Pushing back, ByteDance executives claim that their popular social media platforms – TikTok and its counterpart, Douyin – aren’t streaming music services. The Chinese conglomerate has agreed to pay more in royalties, but won’t pay major labels the guarantees they’ve asked for.
Downplaying the report, Todd Schefflin, the company’s Head of Global Music Development, explained,
“TikTok’s music team partners with many great labels every day around the world forming long-term relationships, rather than just relying on transactional deals for a catalog of full songs.”
Yet, as those negotiations continue making “little progress,” the company has reportedly planned to launch a new streaming music platform.
Did major labels know that ByteDance wants to break into the streaming music market “soon?”
According to the South China Morning Post, ByteDance has started work on a “Spotify-like streaming music app.”
Sources claim that over 100 people are working on the app. Amidst stalled talks with major labels, the Chinese conglomerate plans to launch the new service for overseas markets “soon.”
Downplaying a previous report that the company has sought an IPO in the U.S., ByteDance reportedly no longer sees the need to go public. A public listing “would greatly increase scrutiny” of the cash needed to fund its global expansion strategy.
With TikTok and Douyin’s licensing deals set to expire in a few weeks, the company will have no choice but to agree with music labels’ requests. Thus, ByteDance would have to burn through more cash just to pay for music licenses.
In China, the conglomerate’s most popular apps include Jinri Toutiao, a news aggregator, Douyin, and Faceu, a selfie app. ByteDance claims to have over 250 million daily active users for Douyin, with more added each day.
Yet, the big question remains – will ByteDance ultimately find success in the oversaturated streaming music market?