ByteDance, the owner of TikTok, is in talks with music labels in an effort to expand its music-streaming service to global users, and eventually integrat it within the TikTok app to keep users in its ecosystem. The service will compete with existing global music streaming services such as Spotify, which has 45% paid users, according to Wall Street Journal.

ByteDance’s music streaming service, dubbed Resso, was launched back in March 2020. As a standalone app, Resso is built on a “freemium” model like Spotify. Users can chose to listen to ads or pay to skip them. Resso is currently available in India, Indonesia and Brazil. The app signed licensing deals at the beginning of its launch with the likes of Sony Music Entertainment, Warner Music Group, Merlin and Beggars Group, as well as big regional publishers such as T-Series, Saregama, Zee Music, which are popular in India.

However, Resso isn’t pulling in enough monkey for labels in these markets, according to WSJ quoting people familiar with the matter. Sony has let its licensing agreement with Resso to lapse in all three countries, and all Sony licensed songs are now off the app. Considering ByteDance wishes to eventually make Resso a part of its in-app ecosystem in TikTok, monetization through subscriptions might not be its priority.

Resso will be coming to more than a dozen additional markets in its next phase of expansion. Although the U.S. isn’t on the list, but ByteDance certainly isn’t excluding the market home to a large Gen-Z base from its plans. ByteDance’s vision for Resso extends to the whole globe, including a future opening in the US, according to a 2019 Financial Times report quoting people briefed on the plans.

With the expansion of Resso, ByteDance will be taking on Spotify and Apple Music. Currently, Spotify has 165 million subscribers and close to 45% paid user rate with plans ranging from $4.99 to $15.99, while Apple Music has 88 million subscribers with similar pricing. Resso charges $1.35-1.62/month in India, and has a “watch a video ad to get a period of free listening” mode in Indonesia.

Music has become a priority for ByteDance’s business, both overseas and in China. A year ago, Douyin, TikTok’s Chinese sister app, upgraded its music business to a P1 priority, according to local media reports. Zhu Jun, the former head of TikTok who also led Resso, took on Douyin’s music business as well. In the past year, Douyin has added a the Douyin music trending list and a music player to its platform where users can collect their favorite BGMs and songs. 

In June this year, QiShui Music, a ByteDance music streaming app targeting the Chinese market, opened to the public for beta testing. Like Resso, QiShui Music will be challenging existing industry leaders, such as Tencent’s QQ Music and NetEase Music, and it won’t be easy - in the second quarter of 2022, Tencent had a 539 million MAU while NetEase had 183 million in 2021.