ByteDance, the parent company behind the social media phenomenon TikTok, made plans to launch a music streaming app in China later this year. The product is tentatively named “Feile” and is referred to internally as Luna.

The report, first published by 36Kr on Thursday, said that the app would be managed by the team in charge of TikTok and would contain a customer support team and the involvement of the market strategy and algorithms teams. The customer interaction will be led by Alex Zhu, Vice President of ByteDance’s products and strategy department.

The TikTok marketing team will be in charge of securing deals with various music labels, while the algorithms team will be responsible for technical support.

In March last year, ByteDance released a music streaming app in India called Resso, which it described as a “social music streaming app,” whereby users are encouraged to share lyrics, comments and other user-generated content alongside full-length songs.

The Beijing-based company had in the past also attempted to enter the Chinese music streaming industry. In 2019, it planned to release its streaming app named “W”. However, the project failed due to complications with copyright infringement and flawed product development.

Recently, the company breathed new life into its music streaming ambitions. In April this year, ByteDance announced the establishment of a music division composed of TikTok Music, which manages the domestic music business, and China Music Business Development Group, which is in charge of overseas markets. TechWeb reported that ByteDance began testing its music distribution service for independent artists called “Yinhefangzhou” in July this year.

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By GlobalData

Due to the market dominance long-held by Tencent Music in the Chinese streaming industry, ByteDance had not previously managed to successfully launch its own streaming service. However, China’s State Administration for Market Regulation recently ordered Tencent to give up its exclusive music rights, opening the market up for other companies to enter.

Until recently, Tencent Music was the only Chinese streaming service holding copyright agreements with the world’s biggest record labels – Universal Music, Sony Music and Warner Music. Subsequently, all other streaming platforms in China had to sign sublicence agreements with Tencent to access most musical content.

Yet, despite the end of Tencent’s exclusive deals, it will remain difficult for new players to enter the market, as the tech behemoth has had a head start in building a large user base through the years.

The Shenzhen-based company remains by far the biggest streaming platform in China. The three most popular Chinese music apps, KuGou Music, QQ Music and Kuwo Player, are all operated by Tencent.

Tencent Music is also one of the biggest music streaming providers globally. The top three Chinese music streaming services combined achieved roughly 657 million monthly active users in 2020, according to Tencent Music’s quarterly results. As a comparison, Spotify reported 365 million active users worldwide in the second quarter of 2021.

Compared to the other dominant players in China’s music streaming scene, Tencent Music and NetEase Cloud Music, ByteDance’s key advantage lies in its high publicity rate. The widely popular app Douyin, the Chinese equivalent to TikTok, could bring a high degree of online traffic.

According to GlobalData’s thematic analysis, ByteDance topped the list of industry leaders among social media companies. It scored particularly well in digital media and artificial intelligence, while its main weakness is data privacy.

Meanwhile, Kuaishou, China’s second-largest short-video platform and TikTok’s main rival, also made plans to expand its music library. It recently struck a licensing deal with Warner Music Group, which will give the platform access to the label’s artists on Kuaishou’s overseas products such as Kwai and SnackVideo.

These are lucrative times to enter the Chinese music streaming industry. The digital music market in China doubled between 2019 and 2021 from 10.3bn yuan (US$ 1.6bn) to 20.6bn yuan (US$ 3.2bn), according to Daxue Consulting.