TikTok parent company ByteDance to challenge Spotify and Apple with its own music streaming service

The parent company of viral video app TikTok is preparing to release its own music streaming service which will compete with Spotify and Apple Music.

Chinese technology business ByteDance will target the service at emerging markets such as India, and is likely to release the service within months, Bloomberg reports.

Customers will have to pay to access ByteDance’s planned streaming service - a move that is likely to please record labels due to the higher royalty rates they receive compared with free streaming products.

ByteDance has reportedly already signed rights agreements with two of India’s largest music labels: T-Series and Times Music.

More than 100 ByteDance employees have worked on developing the streaming service, which has not yet reached agreements with the world’s largest record labels: Warner Music, Sony Music and Universal Music.

Spotify has faced issues launching its full music streaming service in India following legal action filed by recording company Warner Music which threatened to block Spotify from offering songs from popular artists including Katy Perry, Bruno Mars and Ed Sheeran. The company eventually launched its service in India in February.

ByteDance’s viral video app TikTok, which is popular amongst teenagers and allows them to share short videos set to music, has already proved that it can dramatically increase the popularity of songs.

The rap song “Old Town Road” by Lil Nas X reached the top of the Billboard Hot 100 in the US after becoming the soundtrack to thousands of popular TikTok videos.

TikTok has grown to half a billion active users on its app, with around 40pc of those outside China and 3.7m in the UK.

Record labels have reportedly asked ByteDance for higher royalties when their songs are used in videos on TikTok and its Chinese-language version Douyin. The current agreements between ByteDance and the record labels are expected to expire within weeks.

A spokesman for ByteDance declined to comment.