TikTok to close music-streaming business in November amid tough competition

ByteDance’s TikTok has announced that it will shut down the TikTok Music streaming service on November 28, which comes as the company has struggled to turn its success in marrying music and videos into a service that could take on the likes of Spotify and Google’s YouTube.

“After this date, access to TikTok Music, including login, subscriptions, and all other functionalities, will no longer be available,” the company said in a notice on its official website.

TikTok did not give a reason for closing its global music-streaming service, but in January it shut down Resso, its music-streaming service for the Indian market, after it was banned from app stores in the country.

Competitive pressures have also been ramping up in a market known for slim profit margins owing to high music royalty fees. Big tech firms such as Google, Apple and Amazon.com have poured resources into offering their own music-streaming services over the past decade. With the shutdown, TikTok intends to “focus on our goal of furthering TikTok’s role in driving even greater music listening and value on music-streaming services, for the benefit of artists, songwriters and the industry”, Ole Obermann, TikTok’s global head of music business development, told industry news site Music Business Worldwide.

The company reminded users to transfer their playlists by October 28 and request refunds by closing day. All account information and personal data will be automatically deleted after the termination of service, according to the company.

TikTok did not immediately respond to a request for comment on Tuesday.

Launched in 2023 in markets including Indonesia and Brazil, the app relied on a subscription model without a free tier, like those offered by Spotify and YouTube Music. TikTok later expanded the service to Singapore and Australia.

Music streaming seemed to be a natural fit for a short video app known for making it easy for users to sync songs to short dance clips. This helped make the app a music trend setter, which TikTok tried to leverage in negotiations with music publishers.

Earlier this year, a dispute between TikTok and Universal Music Group spilled into the public sphere when the world’s second-largest music publisher by revenue pulled its catalogue, including popular artists such as Taylor Swift and BTS, from the platform.

The two struck a new licensing deal in May that bought UMG’s catalogue back to TikTok.

With little to differentiate the music offerings of major streaming services, Big Tech companies have engaged in price competition to woo users. More recently, though, they have been seeking ways to boost revenue in the low-margin business.

YouTube Music, known for its aggressive pricing in emerging markets such as Argentina and India, this week announced a new round of price hikes in multiple markets.

Industry leader Spotify has sought to expand into new audio offerings such as podcasts and audiobooks to get subscribers stick around.

Source : SCMP