TikTok Music: Will Australia Be Among Its First Markets?

Will Australia be one of the first countries to get TikTok Music, ByteDance’s expanded dedicated music streaming service?

In the latest update on ByteDance’s move to take on Spotify, the Wall Street Journal reported it has been in talks with record companies to initially expand into “more than a dozen” new countries.

Citing people familiar with the discussions, the talks have centred around ByteDance’s Resso music streaming service.

It is currently only available in India, Indonesia and Brazil.

“Significant hurdles remain in the negotiations, the people said,” according to the WSJ story.

“But ByteDance wants the service to eventually be integrated within TikTok and to serve as a major platform for distributing music around the world.

“Such an integration would make it easier for artists who market themselves on TikTok to earn more money through streaming.”

None of the dozen+ countries were named but the United States would not be one of them.

Indications are Australia could be one of the first expanded destinations.

It is expected that Resso will rebrand, with ByteDance setting up at least six Twitter accounts for TikTok Music.

These included Australia and New Zealand, Malaysia, Latin America, Singapore and Asia.

Australia was the first country where ByteDance submitted its trademark application, last November.

The trademark filing covered streaming, podcasts and radio broadcasts; allowing users to digitally manage music, photographs, and videos; and even “a function of karaoke.”

32% of Australian adult internet users are TikTok followers who, if international figures can be used, 90% would use it on a daily basis and spend 45.8 minutes a day on the app.

The WSJ described ByteDance’s discussions with record companies as “strained at times over disagreements about how to value TikTok’s promotional benefits for the labels.”

Certainly, TikTok has broken some major hits such as “Heat Waves” by Glass Animals and “Blinding Lights” by the Weeknd.

But it goes back to the general gripes about how much labels make from streaming services.

Executives want a revenue-share basis where labels and artists are paid every time a track is used, rather than an upfront licensing fee.

Is ByteDance in a financial position to do this? In 2021, revenue was up nearly 80% to US $61.7 billion (AU$97.9 billion)

But its expansion also saw it spending $27.4 billion ($43.5 billion), a 79% rise from the previous year.

In comparison, Spotify has found new revenue sources as podcasting to improve its margins, and last month began selling audiobooks.

Music executives are also concerned about Resso’s money-making in its three markets.

Its users’ conversion rate from free to subscription is abysmally low, in the low single percentages.

Spotify’s conversion, on the other hand, was 43% at the end of Q2 2022, with 188 million subscribers versus 433 million global active users.

Sony Music Group recently allowed its agreement with Resso to lapse in all three countries.