ByteDance to challenge Tencent on another battlefield where Alibaba just lost- P...

ByteDance to challenge Tencent on another battlefield where Alibaba just lost- PingWestBytedance

ByteDance to challenge Tencent on another battlefield where Alibaba just lost

Aron Chen

posted on July 8, 2021 4:11 amEditor : Wang Boyuan

ByteDance leverages up music business as the next growth target.

ByteDance is accelerating its diversification strategy as the growth in its core short video business slow.

According to data compiled by Questmobile, TikTok's dramatic growth has slowed after four years of rapid expansion even though it retained its crown as the world's most downloaded non-game app in June with 65 million installs.

Last week, ByteDance repositioned its music streaming product as the priority level business, raising it to the same level of importance as online games and education. 

Following the announcement, the Beijing-based company appointed Alex Zhu, former TikTok boss and vice president of ByteDance's product and strategy, to lead its music streaming business with a primary focus on Resso, a music streaming app that targets overseas markets and rivals to the likes of Spotify and Apple Music.

Alex Zhu co-founded Musial.ly, a phenomenal lip-syncing app, in 2014. ByteDance went on purchasing it with $1 billion in 2016 and merged into TikTok in 2018. Alex Zhu was then appointed as the head of TikTok to oversee the app's businesses and operations. 

Alex Zhu. Image credits: TechCrunch

For Resso and its global expansion ambition, even a figure who is always shy to media as Alex Zhu has seen his second mission to create another TikTok.

With the help of TikTok, ByteDance has built up rich resources surrounding musical intellectual property, influencers, marketing channels. TikTok has already signed licensing deals with Sony Music Entertainment, Warner Music, and Universal Music that enable its short video app to offer songs from their artists for use by content creators on its platform.

Tiktok and Douyin have grown into the mainstream of music. More and more songs want to gain popularity on Douyin and TikTok because clips that borrow certain songs can be identified by the platform's algorithms and find most-matched users. An increasing number of artists now debut their new releases on the short video platform in hopes of becoming viral.

As ByteDance's short video app growth slow, ByteDance has to capitalize on the colossal traffic of TikTok and develop a standalone app that challenges global champions such as Spotify and Apple Music.

In October 2019, ByteDance tapped into the music streaming field by launching a desktop music app called Yin Yue Bang (literally means music tribe). YYB leaked as an early prototype containing only 26 songs, all of which are nevertheless under Douyin's exclusive licenses.

A screenshot of YYB

In March 2020, Resso was launched in India and Indonesia. The launch was relatively low-key since it didn't use much of TikTok to boost download.

Despite ongoing pressure from the US, and Europe where the European Commission claimed TikTok a danger to minors, Resso soon gains its international influence just as its sibling has done.

In Resso's first stop Indonesia, Google Play nominated the app as the region's best fun social music app. According to data from Sensor Tower, Resso quickly amassed 15 million downloads within the six months since its release. 

Resso's success also encourages ByteDance to take on the domestic market, where Tencent owns more than 70% of the share. Another mobile music app from the media giant, Fei Yue, and BeatDynamic, a music distribution platform, were reported in a closed beta test as early as 2020.

Music is just the latest battlefield where ByteDance and Tencent go head to head. ByteDance is threatening the dominance of Tencent in terms of catching people's screen time.

The company has built up its game portfolios through investment and self-development since February 2019.

In October 2019, ByteDance secretly set up a new game development project, the so-called Oasis. Shortly after, it set up a game development team in five of China's big cities, including Beijing, Shanghai, Guangzhou, Shenzhen, and Hangzhou.

The Beijing-based company has completed nearly ten deals related to games so far this year, including the acquisition of Moonton Technology, the developer of Mobile Legends: Bang Bang, which massively prevails in Southeast Asia.

It also launched a brand and official website for its gaming unit Nuverse Games.

ByteDance's short video platforms enable it to build competitive advantages, including marketing and distribution channels, third-party partners to develop games.

Recently, the dispute between two Chinese internet giants heated up after a Tencent executive compared short-video content on other platforms to "pig feed."

ByteDance, in turn, claimed that Tencent prohibits six products from being shared and published directly on its social media apps, WeChat and QQ, affecting more than 1 billion users.

The allegation has no verdict yet. If Fei Yue becomes a thing, it is easily presumed that it will never show up in Tencent's social network.

Kuaishou, ByteDance's biggest rival in the short-form app, recently launched Xiao Sen Chang, a social music app where users can listen, share, and karaoke music for free. 

The description page of Xiao Sen Chang

Like Fei Yue, Xiao Sen Chang is also a product of series of attempts. The short video platform just hit 1 billion monthly active users (MAUs) milestones. But as the MAU is mainly generated in China, where the market is becoming more saturated, the music streaming business is also eyed by Kuaishou teams as a new promising sector.

The Hong-kong listed short video operator has prepared a budget of one billion dollars to grow its overseas user base this year, mainly in Southeast Asia and South America.

Image Credits: Radu Mihai on Unsplash