TikTok recently launched a new rival to the music streaming giant spotify and apple Music, a popular short video app, is exploring new growth avenues.
TikTok Music announced Wednesday that it will be testing the service in Australia, Mexico and Singapore.The announcement was made immediately after the release Indonesia and Brazil Early this month.
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Last week, TikTok also announced: Expansion of license agreements In partnership with Warner Music Group, it aims to expand its music content library. Parent company ByteDance also recently removed the free tier for Resso, another music streaming service it owns.
While these efforts are still in their early stages, analysts said TikTok has key advantages over other music-streaming entrants that could help it gain market share.
“With a large installed base of users already, TikTok can convert them into paying TikTok Music subscribers with relatively low acquisition costs,” said Jonathan Wu, senior research analyst at Philip Securities Research.
According to the data report, Indonesia and Brazil are TikTok’s second and third largest marketsfollowed by the United States, with 113 million and 84.1 million TikTok active users over the age of 18, respectively. Meanwhile, Mexico is TikTok’s fourth largest market with 62.4 million TikTok users.
Brand loyalty among users of these premium incumbent platforms is also so strong that there really isn’t much incentive for users already on Spotify or Apple Music to switch services.
Jonathan Wu
Phillip Securities Research Senior Analyst
“TikTok Music makes it easy [users] Ole Obermann, TikTok’s global head of music business development, said at the launch in Indonesia and Brazil:
TikTok is the second most popular music discovery source for 16- to 19-year-olds, after YouTube. data From MIDIA Research shared with CNBC. MiDIA Research is a UK based research firm covering entertainment and media.
If you’re already in the ecosystem and use TikTok a lot, you might be happy to switch.
Tatiana Chilisano
Music Analyst, MiDIA Research
of MiDIA Q4 Consumer Survey, 48% of respondents said YouTube was one of their main places to find music, and 41% said TikTok. The survey was answered by 9,000 of his people in the US, UK, Australia, Canada, Germany, France, Sweden, South Korea and Brazil.
“Often people listen to different songs on TikTok, but they don’t really want to hear it anywhere else or learn more about the artist,” said MiDIA Research music analyst Tatiana Sirisano.
“The strong potential of TikTok Music is that it can fill that gap,” Cirisano said.
some market share
The music streaming market is currently dominated by Swedish giants Spotify and Apple Music.
According to the International Music Summit Business Report 2023, Spotify accounts for nearly 31% of the global streaming market, followed by Apple Music at 13.7%.
But Cirisano said heavy TikTok users could turn into TikTok Music users if they used other services like Spotify. “If you’re already in the ecosystem and use TikTok that much, you might be happy to switch,” Cirisano said.
Still, Philip Securities Research’s Wu said TikTok Music is “low risk” for Spotify and Apple Music.
“I think surpassing Spotify and Apple Music in terms of market share would be very difficult given their current situation, but TikTok Music could definitely eat some of that share,” said Wu.
“Brand loyalty among users of these premium incumbent platforms is also very strong, so there really isn’t much incentive for users who are already on Spotify or Apple Music to switch services,” Woo said.
He added that he expects monthly subscription pricing for all three services to be “in a similar price range.” In Indonesia, the monthly fee for Spotify Premium is IDR 54,990 ($3.66), while an iOS user pays IDR 49,000 ($3.26) monthly for his TikTok Music.
“As a consumer, why should I pay a monthly fee to listen to TikTok Music when I can listen to it for free on Spotify despite the ads?”
TikTok declined to comment on TikTok Music’s expansion plans. Spotify and Apple Music did not respond to CNBC’s requests for comment.
Promote growth?
TikTok has sought growth outside the United States, where political headwinds are mounting.Its flagship app is It was also banned in Montana and India, the first states to ban it. TikTok’s CEO has previously said the company will pour “billions of dollars” into Southeast Asia over the next few years.
The company’s e-commerce market TikTok Shop is aggressively expanding into Southeast Asia, Oceanwith Shopee AlibabaLazada. These e-commerce efforts also include livestream shopping.
In July, TikTok said livestream shopping wasn’t the only area it was considering when asked if it was the “final destination” of TikTok’s expansion areas.
“Shoppertainment isn’t the only destination, but it’s definitely one of the key areas that we’re putting a lot of effort into, especially in Asia-Pacific,” Shant Oknayan, TikTok’s head of business for Asia-Pacific, Middle East, Africa and Eastern Europe, said at a summit in Jakarta earlier this month.