TikTok Entering Music Streaming

TikTok Enters Music Streaming
Tuner Inc

Music Streaming Continues to Grow

Today we’re taking a deeper dive into an announcement that recently came from TikTok, the video social media app that is very popular and just passed 1.5 billion downloads. TikTok enters music streaming, and they’re trying to directly compete with Spotify, Apple, Tencent Music, and even Amazon. Since the announcement came out, the biggest question people have been asking is why music streaming and why try to compete with Spotify, Apple Music, Amazon, and all the other players in the field?

If you’ve been on TikTok you realize that music is an integral part of their app. Even though their app is based in video, very much like Vine, there’s a huge focus around the music. This may be be partly by design, but also TikTok previously acquired musically or music.ly. It shows that they have had investments in music that were set in place long ago, and are just now starting to come into full fruition. 

With their 1.5 billion downloads, they’ve gathered a lot of data on what songs are popular and what songs promote pieces of content the best. It only makes sense that with their huge size and resources behind them that they create a music streaming service that can compete with the likes of Spotify or Apple music. 

It may not be their main cash flow, but it is definitely something that will prove fruitful for them for a while, because music is usually integrated with content throughout history. The next question that has been constantly asked is what is their master plan. If you’re asking me I think that their master plan is to have every type of social media that we have in the US that is popular. They’re going to try to corner the Chinese market and then take on Alibaba and the other huge companies in the area.

Competition

I think Facebook and maybe even some start-ups are probably going to try to either replicate or out compete how TikTok accomplishes their  music streaming app.  Facebook has already started to put some minor and medium size investments behind social music on their platform so the state of music streaming is getting very interesting. Spotify is not too worried in my opinion yet. 

They actually have a partnership with one of the largest music companies in China, Tencent Music, which brings almost a billion dollars in revenue a year, because of their donations and their micro transactions. Spotify is the best fit to handle this new entry into the market. It’s going to open up a lot of doors for other companies and it’s going to be very interesting to see what happens in the next two to three years.

TikTok I assume will try to take the music streaming experience to the next level. TikTok/ByteDance have data on how music performs with pieces of content, which then go viral, thus they have data points on culture which is very valuable. ByteDance also has the stream counts, which makes for a very interesting duality of data to build a new strategy around to make major cash. They also will have political and real power in the business world, China and the United States all places craving music streaming innovation.

ByteDance

TikTok’s parent company, ByteDance is a huge Chinese conglomerate. Not only did they acquire musical.ly, but they also have bought other companies such as BuzzVideo. Sequoia Capital, a huge investment firm which shovels out huge dollars, to great companies is a lead investor for the company. It’ll be very interesting to see how effective this music streaming app will be in the United States. If I was Apple I’d be slightly worried because while having presence in China, they will not be able to spread Apple Music as easily in China and Chinese companies can in the United States.

Apple’s software products will not be allowed to proliferate in China, because of the security risks for them him and the U.S. Apple really has to study the situation to see where they can go with their music streaming platform. Although ByteDance and TikTok isn’t public. it’s been estimated that their company valuation could be northwards of 100 billion dollars, which is about half the size of Facebook. 

I wouldn’t be surprised if they move very quickly. As US competitors we have to get on the ball and really compete with TikTok and their related services. I still think Facebook is the best set up to compete out of the U.S. companies. Microsoft and any other large to medium sized tech companies could take a leap into the music streaming competition. ByteDance and their music streaming app, which is a derivative TikTok, is going to be starting out in expanding markets such as India and other Southeast Asian countries. 

They announced that they were going to be coming to the U.S. soon and even could even launch within the year. This is a very fast turnaround! We cant’ wait to see how it all shakes out.

Conversation on Facebook’s Entry into Music Streaming via the New Product Experimentation team (NPE)

Interview: Facebook’s Entry into Music

Peter:

We’re going to talk about a a product that we found on Product Hunt, which is a social networking site for products ideas, projects, and companies. You should check it out! We found this app that just released, a Beta, called Aux created by an offshoot of Facebook. Cameron, do you want to go ahead and give us a little bit more information about what this App Aux by Facebook is? 

Cameron:

We’re still not super sure either what it is yet, but currently it’s only available in Canada. We were able to do a little digging around on the Internet and saw that some people in Canada were able to test it out. This stemmed from some of our Product Hunt searches which we do regularly to stay updated on the industry. We see really cool new Betas coming out typically and this just propped up on our recommended products based on our typical music streaming research. This social listening product by the New Product Experimentation team of Facebook looks pretty cool. The idea is that it’s their own take on turntable.FM, which for people who don’t know, it was an online DJ site. 

People would be a DJ and they would have different crowds listening to what they were playing through the website and they were able to either “clap” or “boo” on the song suggestions of the DJ. It was really cool and turntable originally had a little cult community, but in 2013, the service collapsed. The main features of Aux appear to be a way for someone to play music and then have other people listen at the same time. What I don’t know about the App is where this music is coming from? What are the catalogs available to be played and what the mechanics of the actual session for Aux? How does it actually work listening in real time? What are the features? How can you actually interact with the app and the people on it? 

Peter:

At first glance it appears that the Aux gets passed around or taken, rather than a queue or shared music space. People are not adding music to the same area. It’s an interesting take to say the least, but I think the ultimate factor always comes down to people wanting to control their music.

Cameron:

There’s so many different ways to actually approach this social musical experience. For example, with Aux are there different rooms, so it’s not you listening to music by yourself, or do you just listen to music in a predefined room that is shared across the website? It seems like the purpose for Aux is for kids to share music in between classes and listen at the same time at least after our initial breakdown of the app.

We think this is a really cool use case it’s also a little bit interesting. We’re still not really sure about what the full product is, but the way that it was released, by Facebook leads for countless speculation to ensue. The NPE is actually an offshoot company that Facebook created.  We did a little bit of digging on the published app, it said it was published by the NPE team LLC. This was confusing, because all of the reports we saw was that it was from Facebook. Upon investigation we realized that in July of this year Facebook created a separate branch of their product, the New Product division, and within this created a team called the NPE or New Product Experimentation team. 

Peter:

To give people people more background, why would a company like Facebook, do an offshoot arm like this instead of just doing it under their main brand?

Cameron:

I think that the experimentation verb explains a lot of what they want. However, they must still maintain those standards of the Facebook product and stability So this separate arm was created where they can rapidly test some really crazy features and products that could be potentially incorporated into other products. 

Peter:

So let me play devil’s advocate for a second. Shouldn’t people be possibly skeptical given the recent PR from facebook around the world and in the US specifically? Should we be scared or cautious about using an an offshoot of Facebook’s app and the data taken from there. If you mentioned that it’s about kids then maybe we really need to think a couple of times before allowing people to use his right? 

Cameron:

We have to scrutinize every product, and I think Facebook is the biggest example because they have a billion people who use the platform. I don’t think that they are more or less honest or disingenuous than any other major company. I would approach it with the same level of caution that you should approach using anything on the web. It’s interesting analyzing what they’re trying to do here. 

On the Aux website they actually say that the purpose of the separate brand name is to set appropriate expectations with our users, because NPE’s team apps will change very rapidly and will be shut down if we learn that they’re not useful to people. That is their interpretation of the situation it seems.  This may involve more variables than they’re letting onto, but it seems pretty clear that they want to be able to test totally separate things from their main product.  

Peter:

When you put it together like that that, of course they want to do the mass experimentation without hurting their innovation or cash flow in the main business. We’ll see how it shakes out, but we we see this theme of sharable music in many places into the future. 

Cameron:

I think that we talk a lot about the differences between Social Networking Services/Music Streaming services and the melding of the two. Brassroots is a premier music listening experience first and foremost. We want to cultivate the best music streaming experience possible that allows you to take advantage and capitalize in different ways. Popular applications like TikTok for example have a large pillar in music while another in video. The cool thing is people make cool videos with background tracks that are similar to Vine, but because they have the music element it allows for future shareable ability. TikTok recorded seven billion last quarter and in response Facebook released their own version of TikTok with Lasso. There’s not many disadvantages for Facebook to do this, because they’re trying to build their own reach through the mediums. 

Peter:

So let me press on only one last thing that we saw this week, the new AirPods were released. One of the features that they slightly upgraded in these new AirPods was the Bluetooth ability where you can share music with each other if you’re within a close proximity of each other. You both have to have the newest generation AirPods. Brassroots our idea and how we’re implementing it into software is now being joined with amazing hardware which can make these ideas proliferate. Now people are listening to music together on their own if they’re in the same house or area.

Cameron:

Yeah and it’s really cool for Apple to build their hardware product as such. However, Bluetooth 3.0 is allegedly the newest iteration of Bluetooth, and is capable of reaching 150 yards. That would be a game changer! Being able to connect with anyone through Bluetooth within a large proximity has wide possibilities. You could potentially be on the whole other side of the football field or equivalent and be able to still connect through hardware. 

Peter:

I think all these things are aligning for everyone to be more connected with higher bandwdith. I think with music stream specifically, the ultra high bandwidth would be people sharing music and experiencing it together or on a platform that generates collaborative activities in nature. 

Cameron:

I think you’re absolutely right! I think the way it’s going to be most effective is by bringing in data to achieve the desired result both through the actual process of listening to music and the ways that people already enjoy music currently. Think how dynamic this foundation can become in the future; I think that’s where we’re really going to see massive innovation, and why not achieve that with Brassroots. We think some of these innovations in music streaming and the different products in this conversation are just getting started.  It’s going to be really interesting to see the future developments in the space, and if there’s anything that people want to hear us review or talk about let us know. 

For more information on Brassroots make sure to visit brassrootsapp.com

Spotify Quarterly Earnings Takeaways

Spotify Quarterly Earnings
Tuner Inc

The Spotify Quarterly Earnings report showed an astonishing amount of Subscribers. Currently Spotify Premium has 113 million subscribers and 141 million ad-supported subscribers “free version”. It is clear that Spotify is staying ahead of Apple music and Amazon in engagement and reach. Spotify is really honing in on their brand expansion across new markets such as Latin America and India. The brand is being baked into the advertising and expansion of artists in these new markets. 

By getting behind the artists Spotify is able to become intertwined to the local culture and talent pipeline related to music. Spotify is strategically aligning with large corporations such as Google to try to become fully integrated into peoples lives (homes, cars, etc.). The Spotify Quarterly Earnings Report expands upon the promotion of Family Plan Subscribers getting a free Google Home simply for being a subscriber of Spotify. By partnering strategically with large corporations and the focus on joining the cultures of markets they are entering; Spotify has been able to capture bright future prospects for users and their experience on the app.  Spotify for Artists has been a hit for artist trying to Partner and gain tools from Spotify. This is another example of Spotify trying to integrate their brand into creators and consumers minds alike. 

One area Spotify saw a surprising growth on their platform and positive effects as a result was Podcasting. Over 14% of Monthly Active Users also listed to at least one full podcast episode. Although it is early in the days of podcasting, Spotify is proving to be a destination for creators and listeners alike. Spotify is also pulling a play out of Netflix’s book by focusing expanding their own generated content for podcasts including investing in the hosts themselves. This is a genius moves that allows the brand of Spotify to continue to be looked at as a fully integrated audio-technology company. The podcasting industry as a whole is still in its infancy; as the market expands massively over the next ten years Spotify will be in place to capture the most incremental value. Spotify in this quarter alone saw 22 of their own shows launch with tremendous engagement. 

Subsequently, Spotify is expanding usable tools and dashboards for podcast producers to attract new producers towards the platform. This theme is evident in the previous aquisitions of companies such as Anchor, SoundBetter, and Gimlet. Apple Music and Amazon music have not laid the infrastructure that Spotify has for future capturing on a quickly expanding medium. Spotify is without a doubt ahead of the game when laying the infrastructure for the future of audio and the experience around it. Competitors have been unable to match the velocity of Spotify’s moves on emerging markets due to the nature of music as well as some wit/experience. The app experience of course always brings people back to the best music listening experience possible allowing for massive leverage for Spotify and where they want to steer the industry.