TikTok is Ditching Music Streaming — But Spotify Can’t Relax

It’s the day the music died… for TikTok.

The social media giant announced on Tuesday that it’s calling it quits on a music streaming business that barely made it out the door, and only launched trials last year. Hey, why bother with music streamers when you have your hands all over the pipeline?

The Sound of Music

TikTok’s roots are in music and music licensing, specifically. Long ago in the forgotten era we call 2017, the premier short-form video app was Musical.ly, where users could post clips of themselves lip-syncing to their favorite tunes. ByteDance bought Musical.ly in 2017, and in 2018 it was absorbed into TikTok.

TikTok is retreating from music streaming after a very small foray into markets including Indonesia, Brazil, Australia, Singapore, and Mexico. Clearly the market that’s left behind to hoover up isn’t all that appetizing, but just because TikTok’s ducking out of the streaming market doesn’t mean it’s not eyeing Spotify’s lunch:

• According to a blog by MIDiA music analyst Hanna Kahlert, social media platforms are figuring out ways to get users to consume music directly on their platforms rather than sending them off to streaming services.
• “In coming months we will likely see social [media] attempt to monetise consumers more directly, through a number of different techniques, to better realize the value it has for creators and audiences alike,” Kahlert writes.

Speaking to The Daily Upside, Kahlert said TikTok had picked markets in which Spotify isn’t as dominant to try out its music streaming service. “It was like a trial. They were seeing, ‘Can we steal ground from Spotify there?’” Kahlert said, adding that the company may have realized consumers in those markets were already very “social-first,” and therefore it didn’t need a whole new business to compete.

Fear the Brat: Kahlert noted that TikTok’s demographics and Spotify’s subscribers aren’t necessarily the same cohort — people who pay for music streaming services tend to be older, while TikTok’s users are still a pretty young demographic. However, she does think TikTok has the potential to influence how music consumption changes among the younger generations, especially with more artists trying to figure out how to make a living. Kahlert said only 50% of artists actually make any money off streaming, and many are experimenting with social media as a way to get their fans more engaged, and make some cash. “We’re seeing a shift in how artists launch their music,” she said, adding, “Charli XCX is a social-first artist.”