ByteDance Ltd, owner of the popular video app TikTok, is developing a paid music service that will challenge industry leaders such as Spotify and Apple Music in emerging markets, according to people familiar with the matter.
ByteDance expects to introduce the new app as early as this fall in a handful of territories, mostly poorer countries where paid music services have yet to garner large audiences, said the people, who asked not to be identified because the plans haven’t been announced. The company has already secured rights from T-Series and Times Music, two of India’s largest labels, according to executives with those companies.
While the new app isn’t named after TikTok, ByteDance will try to convert some of TikTok’s audience into paying customers, the people said. TikTok and Douyin, its Chinese equivalent, have been downloaded more than 500 million times and have become two of the most influential apps in the contemporary music industry.
ByteDance, based in Beijing, declined to comment.
The new app will include a catalogue of songs available on-demand, as well as video, and isn’t a clone of Spotify or Apple Music, according to the people. The app is far enough along that many music industry executives have been given demonstrations of it.
ByteDance is one of the world’s most valuable start-ups, valued at more than $75 billion in its most recent round of fund raising. The company’s first signature app was Toutiao, a news aggregation app whose name means headlines.
The new paid service will increase the competition between ByteDance and Tencent, which owns WeChat, China’s most popular app.
ByteDance has yet to secure rights from the world’s three largest music groups: Universal, Warner and Sony. Their catalogues account for a minority of listening in most emerging markets, but will be vital if ByteDance wanted to expand anywhere in Europe, Latin America or North America.
Universal, Warner and Sony have tried to limit the availability of music for free on the internet. It also presents an opportunity to squeeze ByteDance for extra money. They credit their songs with TikTok’s popularity, and have demanded hundreds of millions of dollars to renew their current rights deals. Those companies won’t grant the rights for the paid music service without sorting out the rights for TikTok , the people said.