The rise of TikTok, and the assorted controversies around it, have meant there’s a lot more scrutiny of the economics of the app and its parent company ByteDance. Which is welcome for the music industry, as rightsholders go into licensing negotiations keen to strike as advantageous deals as possible.
There are two new bouts of number-wrangling to tell you about today, although both are reports citing unnamed ‘people familiar with the matter’ rather than official announcements from either company.
Start with Reuters’ article on ByteDance’s revenues in the first quarter of this year: bringing in 40bn yuan (around $5.64bn) in the period. That’s year on year growth of more than 130%, with the company reportedly targeting 200bn yuan of revenues for 2020 as a whole – around $28.2bn.
As a reminder, another news outlet, Bloomberg, recently reported that ByteDance’s revenues grew from $7.4bn in 2018 to more than $17bn in 2019, shortly after claiming that in private trading, ByteDance was being valued at $105bn-$110bn as a company – more than Spotify, Tencent Music, SiriusXM and Vivendi put together.
As for TikTok, that’s today’s second story, from tech site The Information. It claims that in 2019, TikTok generated $200m-$300m of revenues globally, but that this year it’s aiming to generate $500m in the US alone – with caveats that nobody quite knows how the Covid-19 pandemic will affect growth in the second half of 2020. The story goes on to suggest that TikTok now has 50 million daily active users in the US.
All highly useful data for those licensing negotiations with the music industry, of course. TikTok does have deals with labels, but relatively short-term ones – understandable for such a fast-growing platform. Meanwhile, publishers – particularly in the US – have been increasingly blunt in their demands for deals, even threatening lawsuits earlier this year. Predictions of a big increase in TikTok’s revenues – and sky-high valuations of its parent company – will only stoke those fires further.