Beijing-based ByteDance, the parent company behind TikTok, is talking to music labels to expand its music-streaming services globally (currently only available in India, Indonesia, and Brazil) to more than a dozen additional markets. While the company wants to make Resso available globally, the U.S. is not a part of its short-term expansion plans, according to the Wall Street Journal.
When Resso was first launched in India in March 2020, the service had license agreements with more than a dozen global, regional and independent labels including Warner Music Group, Sony Music Entertainment, Merlin, and Beggars Group. Sony has since let its agreement with the service lapse. The Journal says the company would have to come to agreements with all of the major music labels to successfully expand globally. Labels have expressed concern about how difficult it is to make money through Resso in the three markets where it currently operates.
Resso differentiates itself from other streaming music platforms by incorporating social sharing into its capabilities. Users can share customizable lyric posters and have the ability to create animated visuals for song backgrounds, which can also be shared.
ByteDance wants to eventually integrate Resso into TikTok, where it would serve as a major music distribution platform, challenging Spotify, Apple Music, Amazon Music, YouTube, and other streaming players for users.
TikTok has already surfaced as an avenue for boosting songs, both new and old, with its widespread shared videos.
In October of 2020, a new generation of listeners discovered the Fleetwood Mac classic “Dreams” thanks to a viral TikTok video posted by Nathan Apodaca riding a skateboard, lip-synching the song while sipping a large bottle of Ocean Spray Cran-Raspberry. The 23-second video has been viewed millions of times and sparked a resurgence of the song from the 1977 album “Rumours.” “Heat Waves” by Glass Animals initially found its audience on TikTok and went on to spend five weeks at No. 1 and has tied the record for most weeks spent on the Billboard Hot 100 chart.
In other words, what does all this mean for TikTok plans to become Global DSPs?
Well, let’s just say the success of a Global DSP execution could set them up to compete with music-streaming rival Spotify.
We know Insider first reported that ByteDance had filed a trademark application for “TikTok Music” in May, 2022.
ByteDance has initiated relationships and communicated business plans with major music labels in order to expand its music streaming services globally, the Wall Street Journal reported Wednesday. The move would set it up to compete with the likes of Spotify.
ByteDance wants the music-streaming service to become part of TikTok’s offerings, acting as a major platform to distribute music globally, the Journal reported, citing unnamed sources who are a part of the discussions. The talks were reported to have been strained at times over disagreements about the valuation of TikTok’s promotional benefits for the labels.
In order to expand into music streaming, ByteDance needs to strike deals with all of the major music labels, via the Journal.
Spotify currently has over 433 million monthly users, via Statista.
TikTok announced in September 2021 that more than 1 billion people come to TikTok every month. Currently, the app is best known for its viral dance videos, Gen Zers favorite search engine, and as a platform for discovering new music.
Move out the way, Spotify and Apple Music
TikTok is now moving to snatch market share from the likes of Spotify and Apple Music.
As we know, the company already runs a streaming app called Resso in India, Brazil, and Indonesia. Resso has styled itself as a social-music app and has sponsored music festivals at universities to push its offering to a young crowd. Resso has also been grabbing market share in India, reported by insider and other sources back in February.
It has also been grabbing market share from other streamers in the past year.
However, more market share does not mean more money trickling in. Very few users are paying for Resso. Consequently, making money off Resso has been difficult in the three markets it operates in, sources told the Journal, anecdotally highlighting the case of Sony Group, which recently let licensing deals lapse in Resso’s three regions and took its songs off Resso’s offerings.
Read the original article on Business Insider
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