With a billion users, TikTok has quickly change into one of the crucial vital players within the music industry and now goals to revolutionize the best way artists are discovered and monetized.
Tolga Akmen | AFP | Getty’s paintings
TikTok recently launched a recent contender for the music streaming giants Spotify AND Apple Music, as a well-liked application for brief movies, is on the lookout for recent ways of development.
TikTok Music said on Wednesday that it can be testing its service in Australia, Mexico and Singapore. This announcement appears shortly after launch Indonesia AND Brazil earlier this month.
Last week, TikTok also announced prolonged license agreement with Warner Music Group as he desires to expand his music content library. Parent company ByteDance also recently dropped the free tier of Resso, one other music streaming service it owns.
While these efforts are of their early stages, analysts said TikTok has key benefits that other music streaming entrants haven’t got that would help it take market share.
“There’s already a big installed base of users that TikTok can convert into paying TikTok Music subscribers – with relatively low customer acquisition costs,” said Jonathan Woo, a senior analyst at Phillip Securities Research.
In accordance with DataReportal, Indonesia and Brazil are TikTok’s second and third largest markets, second only to the US, with 113 million and 84.1 million lively TikTok users aged 18 and over, respectively. Mexico, meanwhile, is the fourth largest TikTok market with 62.4 million TikTok users.
There really is not much incentive to change services for users already using Spotify or Apple Music, as brand loyalty amongst users of those incumbent premium platforms can be very strong.
Jonathan Woo
Senior Analyst, Phillip Securities Research
“TikTok Music will make it easier [users] save, download and share your favorite viral tracks from TikTok,” said Ole Obermann, global head of music business development at TikTok, on the launch in Indonesia and Brazil.
In accordance with data, TikTok is the second hottest source for music discovery by 16 to 19 12 months olds, behind YouTube data with MIDiA Research along with CNBC. MiDIA Research is a British entertainment and media research company.
When you’re already within the ecosystem and use TikTok a lot, it is advisable to switch.
Tatiana Cirisano
Music Analyst, MiDIA Research
IN MiDIA Consumer Survey Fourth Quarter48% of respondents said YouTube is one in all the highest places to find music, while 41% cited TikTok. 9,000 respondents from the US, UK, Australia, Canada, Germany, France, Sweden, South Korea and Brazil participated within the survey.
“Plenty of times people hear loads of different songs on TikTok but don’t make the leap to truly hearken to them elsewhere or learn more in regards to the artist,” said Tatiana Cirisano, a music analyst at MiDIA Research.
“The powerful potential of TikTok Music is that it will possibly fill this gap,” said Cirisano.
Some market share
The music streaming market is currently dominated by the Swedish giant Spotify and Apple Music.
In accordance with the International Music Summit Business Report 2023, Spotify controls almost 31% of the worldwide streaming market, while Apple Music takes 13.7%.
But Cirisano said hardcore TikTok users can convert to TikTok Music users in the event that they use other services like Spotify. “When you’re already within the ecosystem and use TikTok a lot, it is advisable to switch,” Cirisano said.
Still, Woo of Phillip Securities Research said TikTok Music poses “low risk” to Spotify and Apple Music.
“I believe it could be pretty hard to surpass Spotify and Apple Music when it comes to market share given their position, but TikTok Music could definitely eat a few of it,” said Woo.
“There really aren’t many incentives to change services for users already using Spotify or Apple Music because brand loyalty amongst users of those premium platforms can be very strong,” said Woo.
He added that monthly subscription prices for all three services are expected to “be in similar price ranges.” In Indonesia, Spotify Premium costs 54,990 Indonesian rupees ($3.66) per 30 days, while iOS users pay 49,000 Indonesian rupees ($3.26) per 30 days for TikTok Music.
“As a consumer, why would I pay a monthly fee to hearken to TikTok Music once I can listen totally free on Spotify, albeit with ads?”
TikTok declined to comment on TikTok Music’s expansion plans. Spotify and Apple Music didn’t reply to CNBC’s requests for comment.
stimulate growth?
TikTok has sought growth outside of the US, where it faces growing political opposition. Its flagship app was banned in Montana, the primary state to achieve this, in addition to in India. TikTok’s CEO previously said the corporate would pump “billions of dollars” into Southeast Asia over the following few years.
The corporate’s TikTok Shop e-commerce marketplace is aggressively expanding in Southeast Asia to compete with Seashopee i Alibabais Lazada. These e-commerce efforts also include live shopping.
TikTok in July said that live shopping will not be the one area it looks at when asked whether it is the “destination” for TikTok’s expansion areas.
“Shoppertainment will not be the one destination, however it is certainly one in all the primary areas, especially within the Asia-Pacific region, where we have now a powerful foothold,” said Shant Oknayan, head of business for TikTok’s Asia-Pacific, Middle East, and Africa and Eastern Europe, on the Jakarta Summit earlier this month.