TikTok’s New Music Streaming Platform generated excitement yesterday in the music industry.
TikTok officially announced the launch of its new streaming music service, TikTok Music. With access to millions of songs and unique features not available on competitors like Spotify and Apple Music. TikTok Music, therefore, has the potential to make a massive impact on the music industry.
Although initially available only in Indonesia and Brazil, the TikTok’s new music streaming platform ability to generate revenue could be paramount to its success. More importantly this could make it a quick power player in the business.
TikTok Music is launching as a premium-only service, requiring users to pay for access. This differs from platforms like Spotify and YouTube, which offer free access with advertisements. While ad-supported platforms bring in millions of dollars, the value of streams from these types of accounts is not as high for companies like Spotify. Paid subscriptions inject more money into the music industry. This is why the industry has championed these higher-paying options and highlighted their value.
Revenue from paid music streaming subscriptions exceeded $10 billion in the United States alone in 2022. This is according to information shared by the RIAA (Recording Industry Association of America). This milestone marked a significant achievement, and industry experts anticipate further growth in the coming years as more people subscribe to these services. Paid subscriptions are responsible for an incredible 77% of all revenue generated by streaming. Representing nearly two-thirds of the industry’s overall revenue, which is vast. This is especially crucial as sales and other forms of consumption have significantly declined in recent years.
The launch of TikTok Music with its paid subscriptions is a positive development for the industry. The additional revenue generated will continue to revitalize the business of music, which had faced dire circumstances before the advent of platforms like Spotify. While it is too early to predict how many users will sign up for TikTok Music, every person who does will contribute to the music industry by bringing in new money.
News Source: Forbes