TikTok takes on Spotify, Apple Music as it expands into music streaming
With a billion users, TikTok has rapidly become one of the most important players in the music industry, and now has its sights set on revolutionising the way artists are discovered and get paid.
Tolga Akmen | Afp | Getty Images
TikTok recently launched a new rival to music-streaming giants Spotify and Apple Music, as the popular short video app seeks new avenues for growth.
TikTok Music said on Wednesday that it will be testing its service in Australia, Mexico and Singapore. That announcement comes shortly after it launched in Indonesia and Brazil earlier this month.
Last week, TikTok also announced an expanded licensing agreement with Warner Music Group, as it looks to grow its music content library. Parent company ByteDance also recently scrapped the free tier of Resso, another music-streaming service it owns.
While these efforts are in their early days, analysts said TikTok has key advantages that other music-streaming entrants do not possess and that could help it seize market share.
“There’s already this large installed base of users which TikTok can convert into paying TikTok Music subscribers – with a relatively low customer acquisition cost,” said Jonathan Woo, senior research analyst at Phillip Securities Research.
According to DataReportal, Indonesia and Brazil are TikTok’s second- and third-largest markets, behind only the U.S., with 113 million and 84.1 million active TikTok users aged 18 years and above, respectively. Meanwhile, Mexico is TikTok’s fourth-largest market with 62.4 million TikTok users.
There really is not that much incentive to switch services for users already on Spotify or Apple Music as brand loyalty amongst users on these premium incumbent platforms is also very strong.
Jonathan Woo
Senior analyst, Phillip Securities Research
“TikTok Music will make it easy for [users] to save, download and share their favorite viral tracks from TikTok,” Ole Obermann, global head of music business development for TikTok, said during the Indonesia and Brazil launch.
TikTok is the second-most common source of music discovery for 16 to 19 year olds, behind YouTube, according to data from MIDiA Research shared with CNBC. MiDIA Research is a U.K.-based research firm covering entertainment and media.
If you are already in the ecosystem, and you are using TikTok that much, you might be willing to switch over.
Tatiana Cirisano
Music analyst, MiDIA Research
In MiDIA’s fourth-quarter consumer survey, 48% of respondents said YouTube is among their main places for discovering music, while 41% pointed to TikTok. The survey fielded 9,000 respondents across the U.S., U.K., Australia, Canada, Germany, France, Sweden, South Korea and Brazil.
“A lot of times people hear lots of different songs on TikTok, but they don’t make the jump to actually listen to it elsewhere or learn more about the artist,” said Tatiana Cirisano, music analyst at MiDIA Research.
“The powerful potential for TikTok Music is that it could close that gap,” said Cirisano.
Some market share
The music streaming market is currently dominated by Swedish giant Spotify and Apple Music.
Spotify commands almost 31% of the global streaming market with Apple Music following with 13.7%, according to the International Music Summit Business Report 2023.
But Cirisano said that heavy TikTok users could convert into TikTok Music users if they are using other services such as Spotify. “If you’re already in the ecosystem, and you’re using TikTok that much, you might be willing to switch over,” said Cirisano.
Still, Woo of Phillip Securities Research said TikTok Music presents a “low risk” for Spotify and Apple Music.
“I do think that it would be quite difficult to surpass Spotify and Apple Music in terms of market share given their incumbency, but TikTok Music could definitely eat into some of it,” said Woo.
“There really is not that much incentive to switch services for users already on Spotify or Apple Music as brand loyalty amongst users on these premium incumbent platforms is also very strong,” said Woo.
He added that monthly subscription prices for all three services are expected to “be at similar price points.” In Indonesia, Spotify Premium costs 54,990 Indonesian Rupiah ($3.66) monthly while iOS users pay 49,000 Indonesia Rupiah ($3.26) a month for TikTok Music.
“As a consumer, why should I pay a monthly fee to listen on TikTok Music, when I can listen for free on Spotify, albeit with advertisements?”
TikTok declined to comment on TikTok Music’s expansion plans. Spotify and Apple Music did not respond to CNBC’s requests for comment.
Boost growth?
TikTok has been looking for growth outside the U.S., where it faces mounting political headwinds. Its flagship app was banned in Montana, the first state to do so, as well as India. TikTok’s CEO previously said the company will pour “billions of dollars” into Southeast Asia over the next few years.
The company’s e-commerce marketplace TikTok Shop has been aggressively expanding into Southeast Asia, competing against Sea‘s Shopee and Alibaba‘s Lazada. Those e-commerce efforts also include livestream shopping.
TikTok in July said livestream shopping isn’t the only area it is looking into when asked if it is the “end destination” for TikTok’s areas of expansion.
“Shoppertainment is not the only destination, but it is definitely one of the main areas, especially in Asia Pacific that we are leaning in heavily into,” Shant Oknayan, head of business across Asia Pacific, the Middle East and Africa & Eastern Europe at TikTok, said during a summit in Jakarta earlier this month.
Oracle CEO Safra Catz speaks at the FII PRIORITY Summit in Miami Beach, Florida, on Feb. 20, 2025.
Joe Raedle | Getty Images
Oracle shares jumped more than 5% after a recent filing showed a cloud deal that would add over $30 billion annually.
CEO Safra Catz is slated to share the deal news at a company meeting Monday, according to a filing with the Securities and Exchange Commission. The revenues are expected to start hitting in the 2028 fiscal year.
“Oracle is off to a strong start in FY26,” Catz is expected to say, according to the filing. “Our MultiCloud database revenue continues to grow at over 100%, and we signed multiple large cloud services agreements including one that is expected to contribute more than $30 billion in annual revenue starting in FY28.”
The deals revealed Monday by Catz will not affect the company’s 2026 guidance, according to the filing.
U.S. President Donald Trump announced on April 4 that he would again postpone enforcement of a law banning TikTok unless its Chinese owner ByteDance divests from the platform.
Vcg | Visual China Group | Getty Images
U.S. President Donald Trump told Fox News in an interview aired on Sunday that he has a group of “very wealthy people” ready to buy TikTok, whose identities he can reveal in about two weeks.
Trump added that the deal will probably need Beijing’s approval to move forward, but said “I think President Xi will probably do it,” in reference to China’s leader Xi Jinping.
The president made the off-the-cuff remarks while discussing the possibility of another pause of his “reciprocal” tariffs on Fox News’ “Sunday Morning Futures with Maria Bartiromo.”
Tiktok’s fate in the U.S. has been in doubt since the approval of a law in 2024 that sought to ban the platform unless its Chinese owner, ByteDance, divested from it. The legislation was driven by concerns that the Chinese government could manipulate content and access sensitive data from American users.
Earlier this month, Trump extended the deadline for ByteDance to divest from the platform’s U.S. business. It was his third extension since the Supreme Court upheld the TikTok law just a few days before Trump’s second presidential inauguration in January. The new deadline is Sept. 17.
The Protecting Americans from Foreign Adversary Controlled Applications Act, of PAFACA, had originally been set to take effect on Jan. 19, after which app store operators and internet service providers would be penalized for supporting TikTok.
TikTok went dark in the U.S. ahead of the original deadline, but was restored after Trump provided it with assurances on the extension.
Trump, who credited the app with boosting his support among young voters in the last presidential election, has maintained that he would like to see the platform stay afloat under new ownership.
Potential buyers that have voiced interest in the app include Trump insiders such as Oracle’s Larry Ellison to firms like AppLovin and Perplexity AI.
However, it’s unclear if ByteDance would be willing to sell the company. Any potential divestiture is likely to require approval from the Chinese government.
A deal that would have spun off TikTok’s U.S. operations and allowed ByteDance to retain a minority position had been in the works in April, but was derailed by the announcement of Donald Trump’s tariffs on China, Reuters reported that month.
The president previously floated a proposal for American stakeholders to buy the company and then sell a 50% stake to the U.S. government as part of a joint venture.
Experts have previously told CNBC that any potential deal could face legal challenges in the U.S., depending on whether it complies with PAFACA.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Sports2 years agoButton battles heat exhaustion in NASCAR debut
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike