TIKTOK PARENT PLOTS A LEAP INTO STREAMING

The Chinese company that owns TikTok is planning to expand its music-streaming service to compete with Spotify, the Wall Street Journal reported. The first hurdle involves securing deals with labels.

While ByteDance’s ultimate goal is to link TikTok with its music-streaming service Resso, they have a long way to go to have a reach as significant as that of Spotify—it is currently available only in India, Indonesia and Brazil and its planned next phase of expansion does not include the U.S.

Then there’s the issue of pacting with the majors. Sony Music Group is no longer licensing its music to Resso and reps from the majors have already told ByteDance that it’s difficult to make in the markets Resso is in, the Journal reported.

Resso is structured like Spotify with a free, ad-supported tier and a subscription tier. Few are paying, however, and the conversion rate from free to paid is bleak—low single percentages. (Globally, Spotify boasts a 45% conversion rate).

Obviously, ByteDance has stats that show how effective TikTok has been in introducing music to young listeners. The company is exploring how to integrate Resso into the TikTok app, theoretically making it easier for artists marketed on TikTok to grab some money through streaming. The problem remains, though, that the younger audience TikTok attracts has historically not paid for content, especially music. With a bottom line that rocketed last year, revenue was up nearly 80% to $61.7b, is there enough cash to create another vital global streamer? Stay tuned.