TikTok may be shutting down its music service, but it will still compete with streaming

TikTok has announced that it plans to shut down its music streaming service, TikTok Music, at the end of November (per Bloomberg). The company has cautioned users that they should migrate all their playlists to other streaming platforms. 

Social platforms like TikTok have largely been considered complementary to streaming rather than competitive. Audiences are expected to discover songs and artists on platforms like TikTok or Instagram and then follow those artists to streaming platforms, live events, or merch purchases. TikTok Music, although separate from the main app, offered a more seamless experience by allowing users to add and stream full versions of songs heard on TikTok . This made it not only a direct competitor  to the likes of Spotify but also put it in a theoretically preferential position for users. Discontinuing the service – whether it is due to licensing issues or lack of uptake – indicates that TikTok is no longer looking to compete so directly. 

Cue sighs of relief, no doubt, from DSPs –– but they should not let their guard down so quickly. 

Kendrick Lamar recently released a song exclusively on Instagram as a track behind an image of Nike shoes. The post has no caption, the song has no name, but the Reel has over three million likes. The song is not available on streaming. A few months ago, Drake also attempted to release a song exclusively on social, but his label – Universal – quickly had it taken down. 

The lesson? Audiences are discovering content on social media. They are also consuming, saving, and sharing that content exclusively on social media. In MIDiA’s latest creator survey, we found only around half of music artists make any amount of money from streaming – and the artists who earn more income from music overall have learned to rely less on streaming, not more. Meanwhile, more than a third of artists who post their music to social said they preferred to release their music to platforms where they can connect directly with their audiences. Streaming is a one-way street, social goes both ways. Social has the added benefit of being far more active; MIDiA’s consumer surveys show that music streaming is largely a background activity. 

So, if you are an artist who is not making a lot of money on streaming, want to connect directly with your audience, and your audience by and large lives and engages on social – why not skip streaming altogether and release your music directly on social platforms? 

Social platforms are eating entertainment – this is a trend that goes beyond music (and will be discussed deeper in our next social report; keep in touch to be the first to know when it is released!). In coming months we will likely see social attempt to monetise consumers more directly, through a number of different techniques, to better realise the value it has for creators and audiences alike. Social platforms do not need streaming services of their own to compete; the platforms as they are already succeed in doing this. 

So, TikTok may be canning its streaming platform. That does not mean it is not trying to compete with Spotify, however – just that it does not need a streaming service to do so.