TikTok to shutter music streaming business in win for Spotify, Apple - Yahoo Finance

TikTok will shut down its music streaming service beginning Nov. 28, just two years after parent company ByteDance aimed to compete with the likes of Spotify (SPOT) and Apple Music (AAPL).

The company is encouraging its users to utilize the “Add To Music App” feature, which lets users save the songs they discover on TikTok to the music streaming services of their choice. Users were told to transfer playlists to other services no later than Oct. 28.

“We will be closing TikTok Music at the end of November in order to focus on our goal of furthering TikTok’s role in driving even greater music listening and value on music streaming services, for the benefit of artists, songwriters and the industry,” Ole Obermann, global head of music business development at TikTok, said in a statement.

The move represents a shift in strategy for the company, which now no longer wants to compete with third party streaming services. Rather, it wants to continue to partner with them.

Spotify shares ticked higher in early trading following the news, up more than 1%.

ByteDance first initiated talks with music labels to expand the music streaming service, originally dubbed Resso, in 2022. At the time, the goal was to utilize TikTok’s ability to discover new music and make songs go viral.

The new platform, which signed licensing deals with major record labels including Sony Music Entertainment (SONY), Warner Music Group (WMG) and Universal Music Group (UMG.AS), launched in July 2023 with a new name: TikTok Music. It was initially rolled out in Indonesia and Brazil before quickly entering markets including Australia, Mexico and Singapore.

But the company has recently found itself in hot water with those labels over a variety of issues, from appropriate compensation for artists and songwriters to protections from artificial intelligence.

Earlier this year, TikTok and Universal Music Group (UMG) faced a months-long dispute that eliminated the songs of top artists, including Taylor Swift, Drake, Justin Bieber, and Adele, among others, from the platform.

The dispute was eventually resolved in May with the two sides signing an updated agreement that addressed some of the concerns.

TikTok is currently at the center of a bipartisan political battle after President Biden signed new legislation that will ban the app in the US unless ByteDance divests its ownership stake.

After filing a lawsuit to block the new legislation, TikTok argued its case in front of a federal appeals court last week. But if that fails, a ban could come as early as January 2025.