TikTok's Parent Company Plans To Launch A Music Streaming Service

ByteDance, TikTok's parent company, is said to be working on a paid music streaming service. The rumor already emerged in early April which stated that more than 100 employees were participating in this project.

This new service of ByteDance will be launched this fall and focus on emerging markets. Although it is not clear what territories the company will be targeting, they will be poorer nations in which paid music services haven't been common yet.

Besides providing a list of on-demand videos and songs with free and paid tiers, there is no other information about other features in this new app.  According to Bloomberg, this application "isn’t a clone of Spotify or Apple Music."

Thanks to the widespread popularity of TikTok, ByteDance currently possesses a huge number of users all over the world. The company has been developing new applications to look for its next hit after TikTok. Among them is a messaging app called Lark, a Slack's rival and an application called Doushan that works just like Snapchat. However, a music streaming service will help turn a part of TikTok audience into paid subscribers, which is something the company needs right now.

According to Billboard, even when the popularity of TikTok has reached a global level, it is still not profitable. The biggest challenge is to convince people in emerging markets to pay for a music streaming service. Currently, in India, less than one percent of users subscribe to paid music packages and about 14% own a bundled subscription (usually via mobile contracts or Amazon Prime).

India may be on ByteDance's first centralized market list when the company has secured rights from the country's two largest record labels, including Times Music and T-Series (currently the biggest channel on YouTube). Besides, ByteDance is currently in discussion with the world's leading record labels such as Universal, Warner, and Sony.

According to some reliable sources, the company is relying on the old deals that they had previously acquired when TikTok purchased musical.ly. These deals were considerably cheaper because they were given to musical.ly in 2016 when it was just a startup.

In 2018, TikTok with more than 1 billion downloads was the 4th most downloaded non-game app in the world, behind WhatsApp, Facebook Messenger, and Facebook.

It is unlikely for ByteDance to bring the new music app to India without having to wait for major labels' catalogs. The company is required to renegotiate licensing agreements with major music companies for TikTok. And in order to come to an agreement on these catalogs, licensing deals are needed.

The previous license given to ByteDance was a license for startups, but according to a source, it is about to be converted to a commercial one. This means there will be a significant increase in the amount of money the company needs to pay for music use.

This new app of ByteDance is expected to be released this fall.