A report on TikTok in the Wall Street Journal published on October 12 has started a buzz in the music world. According to the story, ByteDance Ltd, the Chinese parent company to TikTok, is in discussions with major music labels with a view to entering the music streaming market in direct competition to Spotify and other services.
Music streaming would be integrated into its existing short video service. ByteDance already has a music streaming service in Resso, which is currently available in India, Brazil, and Indonesia. The plan, according to the report, is to expand to several more countries, and it looks like it may be rebranded as TikTok Music.
Industry observers say it may be a boon for record labels.
International financial consulting firm BNPP Exane issued a statement in the wake of the report. “We view the WSJ [report] as supportive with ByteDance getting closer to launching a global music service which will be critical in reducing the ‘value gap’ and driving improved monetization for labels,” it said.
Plans may already be on the books to expand Resso to several other countries in the near future, but the United States isn’t on that list. To complicate matters, Sony Music Entertainment recently refused to renew its licensing agreement with Resso, pulling their entire catalogue.
ByteDance has not responded to subsequent requests for more details from other media services.
The report doesn’t fully name its sources, said to be close to the company’s operations, but there has been evidence of the move for some time now.
In August, savvy insiders found an application for a US trademark for “TikTok Music”. The application was filed by ByteDance in November 2021 in Australia, and in May 2022 in the United States. As described, it would offer users the ability to “live stream audio and video” as well as “purchase, play, share, download music, songs, albums, lyrics”. Other related patent applications date back to 2018.
It only makes sense for the social media success story to jump into the music streaming game when music is already an integral part of its offerings.
A recent job listing for a backend software engineer for TikTok Music notes that, “TikTok Music team’s mission is to build resonance and inspire expression through music, which includes Resso, TikTok Music and SoundOn.” The job posting goes on to describe the three as separate services, but adds that the company plans to “integrate more ByteDance products in the future”.
While record labels and shareholders may benefit, as the experts seem to think, and consumers may get yet another choice, it’s unclear how, or whether, music artists will gain anything from a new music streaming service.
Payouts for rightsholders from Resso are a function of both ad revenues and subscriptions, similar in structure to Spotify. The WSJ report suggests that some rightsholders are unhappy with low returns.
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