TikTok tunes up a music streaming service

The Future. TikTok parent company ByteDance is looking to expand its music streaming service, Resso, globally. That puts ByteDance in the position to one-day roll Resso into TikTok and create an all-in-one ecosystem of short-form video and music discovery… and maybe the strongest competitor to Spotify’s market dominance.

Shuffle & Repeat
ByteDance wants to take control of music streaming.

• Per WSJ, the company is in discussion with every major music label to expand Resso beyond India, Indonesia, and Brazil into a dozen other major markets.
• That would create a pipeline for people to discover music on TikTok and then be directed to subscribe to Resso to listen to the full song.
• The US wouldn’t be part of this expansion, but ByteDance wouldn’t probably want to pull that trigger until Resso could be merged with TikTok.

That ultimate TikTok-Resso merge would open substantial new lines of revenue for the spend-heavy ByteDance. While ByteDance’s revenue is up 80% annually, it spent 79% more to get there.

The long reach of short form
Despite every label wanting to be on whatever this future TikTok/Resso super-app is, discussions over the economics are apparently tough.

• The labels already complain that the payouts from Resso are meager, especially as the platform struggles to convert free ad-supported subscribers into paid-premium ones.
• So, the labels want more money (actually more in line with industry standards, which ByteDance has been hesitant to pay). At the same time, ByteDance says that TikTok’s promotional benefits are more than worth it.

And TikTok does have an outsized influence on the music landscape at large — minting Billboard chart-toppers, launching songs from mainstream artists, and turning unknowns into stars seemingly overnight. A merge may even help with artist burnout by creating a pipeline for people to easily listen to a full song after it goes viral on the platform.

But at the end of the day, no one wants to get paid less than the pennies-per-stream they already do on Spotify.