Welcome back to Penny Fractions! New year, new decade, same old newsletter. Well, this week’s newsletter is a bit different since I do go a bit longer than normal by introducing a new section. At the end of last year, I put out a list of my favorite media but this year I’m keeping an ever-growing Google Doc of albums, books, and mixes that I enjoy, in case you’d like to follow. Also, if you asked for a physical copy of ‘Nu-Music: A Gig Economy Solution’ I will be shipping those out shortly! If anyone else wants one, please do let me know because I may do another print run soon.
The last bit of news is slightly sad but necessary. This year, I’ll be taking off a bit more time so that I can focus on other projects and not get too burnt out on the week-over-week process of writing this newsletter. I’m very excited about some upcoming work but it’ll just require me getting a little bit more time to breathe. Well, enough throat-clearing, let’s dive back into the world of TikTok and Resso!
Last month, after a number of early leaks and rumors, TikTok's owner Bytedance unveiled its new music streaming platform to the public: Resso. The app appeared on app stores in India and Indonesia as a soft launch and now there are increased eyes on the rather sudden arrival of a new player within the music streaming market. I wanted to start the year looking at Resso as a way to understand Bytedance’s position within the broader music industry and how best to access what is likely to be rather intense expectations of a new platform.
I wrote about TikTok last February before the mainstream arrival of Lil Nas X’s “Old Town Road” and about the app’s rapid growth surpassing 1.5 billion global downloads. (I must say that reporting on “downloads” rather than monthly active users is a great way to inflate an app’s perceived popularity.) My write-up centered on the way that TikTok, back when it was called Musical.ly, positioned itself as wanting to build an advertising platform akin to YouTube. Nearly one year later, the advertising side of TikTok has only grown as it fostered partnerships with companies like Chipotle and received support from record labels, who are not only trying to make stars out of viral hits but using the platform’s native stars to push artists' music, too.
The Verge reported on TikTok’s slow-developing advertising business where brands are securing better deals than on more established marketplaces like Instagram or YouTube. Whether it involves arranging deals directly with the company or creators, the decision to rely on advertising can provide a good lens to view Bytedance’s new app, Resso.
Music streaming, as currently composed, is consolidated into a few firms with a limited number of ways of achieving “success” at a certain level of scale. This ends up discouraging the creation of new business models, as there’s already an established path. That’s what’s so frustrating about reading early reports on Resso. Music Ally’s early impressions of the app made it clear not to expect anything new. There was no sign of deeper social features beyond track commenting, ways to interact with artists (ala Twitch), or anything that wasn’t already building upon features that Gaana and Spotify currently offer, like shareable lyrics and song cards. Now, if there isn’t really anything groundbreaking about the app, then how exactly will Resso break into an already-saturated market full of music apps that offer the same feature sets and catalogs? Well, let’s dig into that question a bit further.
Resso is launching in India in order to leverage TikTok’s already monstrous footprint (120 million monthly active users) to jump-start the app. Back in 2018, I wrote about my skepticism around Spotify entering the Indian market, which I still hold given that it’s suddenly a rather cheap family plan. I hold a similar, though not quite as extreme, skepticism towards Resso. TikTok isn’t as dominant in music as YouTube or Gaan (which reportedly has 125 million MAU) nor does it have the telco backing of JioSaavn. The higher price point is also a reason to question its market potential. India isn’t at peak streaming the way other markets are, but Resso will be heavily relying on that TikTok leverage for it to connect to Indian audiences.
Europe / United States
There are currently no rumors around Resso entering Europe but there is little reason to expect the app to make a real ripple in these countries. Spotify continues to see steady growth across the continent, even if there is stagnation in matured Nordic markets that’s led to price increase tests. Similar conditions are arising in the United States, with Spotify seeing even slower growth here over the last two years due to some degree of competition with Apple Music.
2015 was the last year that a new major streaming platform arrived in the United States and since then, most companies have simply pulled features from each other’s products. The market has actually decreased, not increased, in varied products over the last decade. There certainly could be an opening for a different kind of music streaming platform but, so far, Resso doesn’t appear to be that. While TikTok’s sudden rise is impressive, I’d like to say it’s certainly boosted by a news press desperate for a new app to cover and a Vine-sized gap for short-form video content, especially as YouTube leans on longer-form content. That same void doesn’t exist within nearly-identical music streaming platforms.
Latin / South America
Spotify and YouTube found massive success in Latin and South America, so what about Resso? I doubt it. An entirely under-reported reason for Spotify’s success in Latin / South America is the company’s aggressive partnership with telcos to make it the music streaming platform for early smartphone users. This is a once-in-a-generation wave that the company rode very well. The shift from digital music consumption needing a desktop to just requiring a phone created a large shift in the platforms people interacted with, but Resso isn’t going to benefit from that stroke of historical luck. We’ve yet to see a real second generation of music streaming platforms built on the shoulders of Spotify and YouTube but Resso, at least for now, doesn’t appear to be built to lead the next generation of streaming platforms, since arriving post-smart phone adoption across most major global markets is going to be hard to overcome.
A Boring Viral Company
The authors David Hesmondhalgh, Ellis Jones, and Andreas Rauhcame, in a Social Media + Society paper, ‘SoundCloud and Bandcamp as Alternative Music Platforms’, used the phrases “consumer-oriented” and “producer-oriented” platforms to describe the differences between a Spotify/Apple Music and a Bandcamp/SoundCloud. The former exhibits rent-seeking behavior associated with product platforms as described by Nick Srnicek’s Platform Capitalism, whereas the latter is described as “the residues of the hopes for democratization of cultural production and consumption that were so widely heard in the first decade of the twenty-first century. In many respects, these producer-oriented platforms have become the principal site for ‘alternative’ music, in the way that independent, alternative record companies and record shops once were (Kruse, 2003).”
I could unpack a bit further what it means for “independent” music to no longer be built upon truly independent spaces but, broadly speaking, the “producer-oriented” platform is the imagined ideal of what the internet could’ve offered musicians in the late 90s, while the “consumer-oriented” platform can be traced back to the digital jukebox idea that Sony Music hinted at back in 1997, where both artists and fans lose control over music ownership. This can be a helpful way to access emerging platforms within this space.
Right now, it would appear that with TikTok and Resso, Bytedance is simply looking to recreate the consumer-oriented platform reliant on advertising at scale to pull in money while constantly feeling major labels breathe down its neck. Artists understand fully well that another platform seeking rent will not meaningfully change their downward position in the industry. Instead, we’re looking at just another new player playing by the same rules to enrich those at the top of the industry.
A quick update in the lovely saga of Sofar Sounds. The company put out a blog post explaining its updated payment structure. It’s certainly better than before but that’s not saying much. The band Mannequin Pussy explained, via Twitter, written on the Notes app, why they’re playing Coachella and while extolling the corporate shittiness of Coachella and in particular AEG, which owns a large chunk of live music venues across the United States. If one is annoyed at bands being put in a no-win scenario, I’d suggest checking how many of one’s local venues are owned by AEG or Live Nation -- probably more than you’d think.
6 Links 2 Read
Official: Universal Music Group to Sell 10% Stake, Worth Over $3bn, to Tencent-led Consortium - Music Business Worldwide
It was rumored that Tencent Music Entertainment was going to buy part of UMG with the help of Singapore’s Sovereign Wealth Fund, which would be a rather interesting development to this story if it turned out to be true. Otherwise, please, and I cannot stress this enough, click this little graphic that Cherie Hu made to describe the financialized web of music company ownership.
Are Podcasts Threatening the Growth of the Music Industry? - Rolling Stone
I don’t know if podcasts are a real threat to music, because similar to what I wrote here, I find the competition framing in these kinds of ways rather poor. However, many of the concerns about private equity encroaching into music and there being too many eggs in the streaming basket are ones that I’m more receptive to considering.
Who’s the Biggest Music Publisher in the World? - Music Business Worldwide
The consolidation of music publishing is a topic that I’m interested in trying to dive a bit more into this year, so I’m just putting down a tab here.
I’m oddly fascinated by Spotify’s increasing retreat from politics over the last two years when only a couple of years ago they were plastering New York City subways with ads explicitly referencing President Trump’s travel ban.
The classic “How Contemporary Pop Music Works” piece is given a 2020 update. I can’t say that anything about this struck me as too surprising, except for a passing mention of skip rate, which is absolutely one of the least helpful markers of a song’s quality ...but that’s a topic for another day.
I feel we could all use a refresher of what “independent” means in 2020 but there are still some interesting thoughts here.