The makers of TikTok, the runaway most popular iOS app for the past five consecutive quarters, are planning to get into the streaming music game.
According to a new report, ByteDance is gearing up to launch a streaming music service to take on the likes of Spotify and Apple Music.
Here in 2019, there’s no shortage of streaming music services, of course. Of these, Spotify and Apple Music are the runaways winners — while everyone else is fighting for scraps. The interesting part of ByteDance’s pitch is that it will supposedly be aimed at developing markets.
Targeting a different market
In particular, it seems that it will focus on India and China — although it could also roll out further afield. These two markets are interesting when it comes to streaming music. The prices of streaming services are considerably cheaper in both.
For instance, in India, Apple Music costs the equivalent of just $2 per month. It costs a similar amount in China. That makes it a fraction of the cost of what Apple charges in the U.S. or elsewhere. Given the tough economics of streaming, seen by the fact that Spotify still has yet to make a profit, that seems like a flawed business model.
However, companies stick at this price point because they massive number of potential customers could still make such a service into a money-spinner if enough people subscribe.
There are already local streaming music services in these markets. In India, for instance, there is Gaana, JioSaavn and Wynk. But ByteDance’s deep pockets could instantly make it competitive. As part of its route to market, it is brokering deals with a number of music publishers.
As per Spotify’s most recent financial results, it has more than 100 million paid users. Apple Music, meanwhile, has around half this number. However, Apple Music may still have more paid subscribers in the United States.
Source: Bloomberg
