ByteDance Plans Music App and Smartphone as Chinese Competition Intensifies

ByteDance, the Beijing-based content company widely known as one of the world’s most valuable startups, is reportedly developing a music streaming service and also a branded smartphone of its own.

The news comes at a time when ByteDance and Tencent are going after control of China’s fast-emerging social-media landscape, one in which both players are reinventing digital entertainment in the world’s most populous country. Both companies are making headlines.

ByteDance operates TikTok, a short-form video app surpassing the one-billion download mark, eclipsing popular social-video app, Instagram. This week, ByteDance announced TikTok would be integrating music in a new sharing option.

While plans have yet to be officially announced, Bloomberg reports that the new music-streaming app will offer free and paid subscription tiers focused on emerging markets, “mostly poorer countries where paid music services have yet to garner large audiences.”

A target launch date for the end of the first quarter is anticipated.

ByteDance acquired a large user base in a short amount of time largely due to acquisitions and TikTok’s explosive popularity in China and elsewhere. Industry observers believe a music streaming service might be a more direct way for ByteDance to convert its TikTok audience into paying subscribers, and are waiting to learn how it will price this service.

The company is believed to be eyeing India as its first market, where it has already secured rights from two of the country’s largest music labels. It is apparently negotiating new deals with Sony, Universal and Warner as well.

Table: ByteDance’s TikTok Timeline

October 2010U.S.-based video-sharing app Instagram founded
September 2011U.S.-based multimedia-sharing app Snapchat founded
September 2016Founded by ByteDance under the name Douyin inside China
September 2017Launched by ByteDance under the name TikTok outside China
November 2017ByteDance purchases to target U.S. teenage market
August 2018ByteDance merges TikTok and
October 2018TikTok becomes most downloaded app in the U.S.
February 2019TikTok achieves one billion downloads globally

It was also learned this week that Snapchat is adding a music option to its video-messaging platform. Snapchat’s owner, Snap Inc., has been in talks with a number of record labels in an effort to broker deals letting the company add more music to its app, according to the The Wall Street Journal.

If things progress, Snapchat will offer music features similar to Instagram and TikTok, a signal that Snap wants to lure fans away from TikTok.

The Smartphone as Global Growth Strategy

On the hardware front, ByteDance plans to launch a phone preloaded with its own apps in a bid to extend its reach.

The company, with a $75 billion valuation known as one of the world’s biggest startups, is one of the few tech companies from China to boast a large user base outside its home market, including India and the U.S.

The device would draw on acquired patents and talent from Chinese phone Smartisan, and would come loaded with ByteDance apps. 

Smartphone pre-installs have long been a popular way for Chinese internet companies to ramp up user bases. There’s also urgency from ByteDance to build more user acquisition channels. The company failed to hit its revenue target for the first time last year amid slowing ad spending in China.

ByteDance: What to Know

  • Headquartered in Beijing
  • Founded in 2012
  • Content platform with more than 800 million active daily users
  • Core product, Toutiao, is a personalized news and information content platform
  • Toutiao is one of China’s largest mobile platforms of content creation, aggregation and distribution using machine learning