TikTok parent ByteDance has begun talks with music labels about expanding its music-streaming service into more than a dozen markets in a move that would place it in direct competition with Spotify, Apple Music and other major streaming services, according to the Wall Street Journal.
According to the report, the initial plan is to expand the company’s Resso service, which is currently only available in India, Indonesia and Brazil, into more than a dozen markets, although the U.S. is not said to be part of the next phase of expansion.
The Journal’s sources say significant hurdles remain in the negotiations, but ByteDance wants the service to eventually be integrated within TikTok and to serve as a major platform for distributing music around the world.
The talks have been strained at times over disagreements about how to value TikTok’s promotional benefits for the labels, the sources said, and concern over possible Chinese government involvement with the service is also likely to be a factor.
However, the move seems a natural one for TikTok, as it has become the single biggest factor in making songs into hits over the past few years. The biggest singles of the 2020s, including the Weeknd’s “Blinding Lights,” Glass Animals’ “Heat Waves” and Olivia Rodrigo’s “Drivers License,” were enormous TikTok viral hits, and Lil Nas X was just the first of dozens of musical artists who saw their careers launched by success on the service.
As the Journal notes, ByteDance’s expansion in music streaming would help keep its users on the platform, although the royalty issues are presumably complex, considering that the music companies with whom the Chinese-based company must negotiate licenses have often complained about the low royalties paid out by Resso thus far and TikTok — which operates under a different license from streaming services — in general. Sony Music recently allowed its agreement with Resso to lapse, and its music was removed from the service.
ByteDance’s revenue continues to expand, up nearly 80% to $61.7 billion in 2021, but so too are the company’s expenses as it focuses on growth. The Chinese company’s cost of sales came in at $27.4 billion for 2021, up 79% from the previous year, The Wall Street Journal reported earlier this month.
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