Wall Street Journal says TikTok music service talks on going but strained
Business News Digital Labels & Publishers
By Chris Cooke | Published on Thursday 13 October 2022
The Wall Street Journal has reported that – while talks are ongoing between TikTok parent company Bytedance and the music majors about the former expanding its subscription streaming operations – significant hurdles remain to be crossed before any deal can be agreed.
It’s been known for a while that Bytedance wants to expand its music streaming service Resso – currently available in India, Indonesia and Brazil – into many more markets, and to more closely connect Resso and TikTok.
So, you know, when a track goes viral on TikTok and everyone starts streaming it, that streaming happens within the Bytedance ecosystem rather than everyone jumping over to Spotify or Apple Music, or worse still YouTube.
However, Bytedance is negotiating with the majors about the Resso expansion just as the music companies are starting to think they should be earning much more from their licensing deals with the main TikTok platform, given just how big TikTok has become and the key role music arguably plays in many of the videos uploaded to the service.
So while Bytedance likely sees the marketing power of TikTok as a way to get a better deal around the global growth of Resso, the labels and publishers see Bytedance’s Resso ambitions as a way to get a better deal from TikTok. Which is presumably making for some fun deal negotiations. And that’s before you even consider Sony Music’s recent issues with Resso as it is currently operating.
Citing various sources, the WSJ reported yesterday that: “TikTok parent ByteDance Ltd has begun talks with music labels about expanding its music-streaming service globally to compete with industry leaders including Spotify Technology SA”. However, “significant hurdles remain in the negotiations”, and “talks have been strained at times over disagreements about how to value TikTok’s promotional benefits for the labels”.
Spotify doom-sayers reckon that a big move by TikTok into the subscription streaming space globally could pose a significant challenge for the current market leader in premium music streaming, with Yahoo Finance reporting yesterday that “Spotify stock erased gains on Wednesday after a new report from the Wall Street Journal revealed that TikTok parent company ByteDance has begun talks with music labels to expand its music streaming service”.
Spotify’s share price has been below the $100 mark for nearly a month now and continues to wobble, but there are various reasons for that. And while a big push into music streaming by TikTok would definitely be a challenge for the Spotify business, it’s never assured that a digital platform that dominates in one kind of content consumption can achieve similar success in another kind.
I guess we’ll see how Bytedance performs in the wider subscription streaming domain if and when these major label deal talks reach some sort of conclusion.
READ MORE ABOUT: Resso | TikTok
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