Could TikTok's Music Streaming App Spell the End for Spotify?
Huge news hit the music industry this week when The Wall Street Journal reported that ByteDance -- parent company of the short-form video application TikTok -- wants to roll out its music streaming app globally. The app is called Resso and currently is operational in just three markets: India, Indonesia, and Brazil. According to the report, ByteDance is in talks with music labels to get its streaming app available in as many markets as possible and wants to eventually merge it into its flagship TikTok app.
Leading music streaming service Spotify (NYSE: SPOT) sank on the news and is now down 65% year to date. Resso going global surely has some Spotify investors nervous, but here are a few reasons why those worries may be unwarranted.
As the report stated, ByteDance is in talks with music labels about bringing their music catalogs onto Resso in more than just three countries. These negotiations and license contracts don't happen overnight, meaning that we likely won't see a full rollout of Resso across North America and Europe for a few years. For reference, it took Spotify over a decade to officially launch its music streaming service in virtually every country outside of China.
Source Fool.com
