There has been talk for some time now of TikTok parent ByteDance launching a music streaming service in Western markets. It already has Resso in Indonesia, India, and Brazil, but has spiked interest recently with trademark registrations, new Twitter accounts, and reports that ‘more than a dozen’ new markets are being prepped. TikTok has become one of the central forces in the digital music market ecosystem, eroding the cultural capital of traditional streaming services. It is a logical leap to assume that if TikTok becomes a key force in music discovery, it could do the same for consumption. While this is certainly the case, ByteDance’s streaming opportunity is a whole lot bigger and more disruptive than Resso:
TikTok Music: Resso is a perfectly decent streaming service, but similarly to YouTube Music, it only scratches the surface of what it could be. Both TikTok and YouTube have unique content, behaviour, features, and culture that stand in stark contrast to standard streaming. It is difficult to translate much of this because of licensing constraints but doing so should be the priority for both TikTok and YouTube. This will drive differentiation and help the industry carve out genuine new growth pockets rather than just unearthing the remnants of the addressable base for standard streaming. Of even more relevance to the music business, unless rightsholders can empower ByteDance’s streaming offering with something truly different, is the risk that its growth will largely comprise of switching Spotify subscribers. The music business needs the maturing streaming market to be about growth, not substitution. Perhaps TikTok Music Twitter profiles point to something bigger and bolder than Resso.
Discovery is consumption: People used to discover music on the radio and then go and buy it. That model has been turned upside down. Now, people (younger audiences in particular) discover most of their new music on TikTok or YouTube before going to radio-like streaming services to consume it. What is more, much of the ‘discovery’ that happens on TikTok is consumption. It is not just consumption either, it is consumption that streaming cannot replicate. This is before even considering the importance of ‘lean through’ creative behaviour, such as doing a duet or a dance challenge to your favourite artist’s new track. Music is the soundtrack and often the catalyst to this ‘consumption’, but when that music is listened to on streaming, it is stripped of all that creative and cultural context – It is like only listening to the soundtrack of a movie. Movie soundtracks do well as formats, but they only exist because of the movies as that is where the real value lies. All of this is why a TikTok Music service could be so exciting as it could provide both the creative and cultural context, not just the stripped-down audio file.
Ecosystem: The single most important factor of all though is TikTok’s ecosystem play. In the traditional streaming value chain, you have creators, rights, distribution, promotion, and consumption. TikTok achieves these with its superpower: its audience. Creation comes from the audience, who then distribute and market the content (via the user-centric algorithm framework, user shares, recreation, and other means), and then, of course, the audience consumes. It is a self-contained, virtuous cycle – An ecosystem. Right now, artists are pumped into the system by label marketing teams, and independent artists can push out of the system into traditional streaming with SoundOn. Yet, over time, TikTok’s creation, distribution, and consumption will become ever more self-contained, making TikTok part of what MIDiA identified as the music industry counter-culture. TikTok Music could be a major step on that journey.
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