New Delhi: The entry of ByteDance Technology Co Ltd, the parent company of popular short video app TikTok, in the online music streaming space will boost the nascent India market, experts believe.
According to a Financial Times report, TikTok is in talks with big music labels - Universal Music, Sony Music and Warner Music - for global licensing deals to include their songs on its new music subscription service.
The company is expected to launch a music streaming service as soon as next month, initially in emerging markets including India, Indonesia and Brazil, before entering the United States, the report said, citing people privy to the development.
Jehil Thakkar, Head, Media and Entertainment Partner at Deloitte India, believes that online music market in India is quite nascent with immense potential and a lot of headroom.
“I think new players that can offer streaming apps with differentiated features will eventually help expand the market. Any expansion works well for the copyright holders which are the music labels. We are in a phase there’s still habit formation going on with people moving away traditional way of consuming music to streaming. While metros have adapted well small-town India still has to move in that direction," he noted.
In addition to on-demand music, ByteDance's app will include a library of short video clips for listeners to search through and sync to songs as they listen, the FT report added. This feature differentiates TikTok from the existing players such as Spotify, JioSaavn and Gaana.
“Apps which are more interactive, feature user generated content (UGC), have renewed interest in the streaming space, and will help expanding the userbase," Thakkar added.
A recent report by Deloitte and the Indian Music Industry (IMI) pegged the overall music industry in India at ₹1,068 crore, which presently generates a revenue of ₹270 crore.
With 451 million monthly active internet users as of March 2019, India is now second only to China in terms of internet users, according to a report by Internet and Mobile Association of India (IAMAI). However, with only 36% internet penetration, there is still much headroom for growth. The digital revolution has led to creation of internet economy in the country including music streaming platforms.
In February, Swedish music streaming app Spotify entered India which globally claims to have 248 million monthly active users and 113 million paid subscribers.
At ₹1,189 yearly plan, Spotify is one of the premium music streaming apps in the country, competing with Apple Music. Both Gaana and JioSaavn offer subscriptions starting at ₹99 per month, and have free ad-supported services as well.
Amarjit Singh Batra, Managing Director - Spotify India, believes that cheap data tariffs, affordable smartphones, and most importantly one of the youngest populations in the world with access to the global pop culture, make India a relevant market for music streaming companies.