TikTok officially enters the world of music streaming with the launch of TikTok Musica new rival to industry giants such as Spotify e Apple Music. A novelty that could be successful, especially considering the recent price increase in the United States for Spotify. But that faces the same YouTube Music challenge: platforms for discovering new music don’t always become ideal for listening to it.
Can TikTok Music challenge Spotify and Apple Music?
On Wednesday, TikTok Music announced that it will start testing its service in Australia, Mexico and Singapore. This announcement follows the recent launch in Indonesia and Brazil earlier this month. These are not small markets to test: Indonesia and Brazil are the second and third largest markets for TikTok, after the United States.
DataReportal reveals that Indonesia and Brazil have respectively 113 million and 84.1 million TikTok users active over the age of 18. And Mexico is TikTok’s fourth largest market, with 62.4 million of active TikTok users. If we exclude the US, with which TikTok currently has a complex relationship, the service is debuting in all the most important markets for the service.
A world of music
To support this ambitious project, TikTok has entered into an expanded licensing deal with Warner Music Group, one of the world’s leading record companies. This deal will allow TikTok Music to further expand the its library of music content, ensuring users have a large selection of songs to listen to.
TikTok’s parent company, ByteDance, has taken a bold strategy deleting the free tier of Resso, another music streaming service it owns. This move can indicate a greater focus on converting users into paying subscribers, a step that could help ensure greater financial viability for TikTok Music.
TikTok is where so many young people discover new music
Industry analysts note that TikTok has a distinct edge over its competitors in music streaming. TikTok’s large user base provides a unique opportunity to easily convert existing users into paying TikTok Music subscribers.
As noted by CNBC, the global head of music business development for TikTok Be Obermann: “TikTok Music will make it easy for [gli utenti] save, download and share their favorite viral tracks from TikTok”.
According to data from MIDiA Research, TikTok is the second most common source of music discovery for 16- to 19-year-olds, right after YouTube. In MiDIA’s fourth quarter survey of 9,000 respondents in the US, UK, Australia, Canada, Germany, France, Sweden, South Korea and Brazil, 48% of respondents indicated YouTube as one of the leading places to discover new music, while the 41% if you mention TikTok.
This data underlines the potential of TikTok Music: for many, it already has an important role in the universe of music streaming. But it must also be borne in mind that, While nearly every second user finds new music on YouTube, YouTube Music subscriptions aren’t their number one source of income for the Mountain View company. So TikTok Music’s great position doesn’t mean it can beat Spotify and Apple Music.
Can TikTok Music steal market share from Spotify?
Currently, the music streaming market is dominated by two major players: Spotify e Apple Music. Secondo l’International Music Summit Business Report 2023, Spotify holds nearly 31% global market sharefollowed by Apple Music with 13.7%.
In the CNBC article, Jonathan Woo, senior research analyst at Phillip Securities Research, highlighted that TikTok Music features a “low risk” for Spotify and Apple Music. While heavy social media users may switch to TikTok streaming, eroding market share will be tough. According to Woo, it will be difficult for TikTok Music to compete with Spotify and Apple Music in terms of market share, given their established position of these two platforms.
Price question?
A difference could be made by the price. Spotify has raised its prices in the US, the UK and also in other European countries: a dollar (or a euro) more on individual subscriptions. Considering that Apple Music, Amazon Music and Tidal have also adjusted prices upwards.
In Indonesia, Spotify Premium costs slightly more (54,990 Indonesian rupees) than TikTok Music (49,000). But these are prices far from the Italian ones – we are around three euros, a third of the current cost. So the difference may be more pronounced. But the fact remains that Spotify leaves the free option: many users may be limited to listen to some more commercials.
What do you think about it? Could TikTok Music Become a Winning Spotify Premium Alternative? Or will it fail to succeed? Let us know your opinion in the comments.