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.
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.
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.