TikTok owner ByteDance Ltd. is scrapping the free tier of Resso, its music streaming service for emerging markets.
(Bloomberg) — TikTok owner ByteDance Ltd. is scrapping the free tier of Resso, its music streaming service for emerging markets.
Available in India, Indonesia and Brazil, the Spotify-like Resso will continue only as a paid-for service from May 11, the company said in a statement Wednesday. It had offered an advertising-supported free tier since Resso’s initial release in late 2019.
Reworking the service’s pricing may be part of cost-cutting measures as internet firms like ByteDance focus on profitability during a global economic downturn. It’s also in line with a growing move toward charging for formerly free online services — such as with Twitter and Meta Platforms Inc. asking users to pay for verification.
The markets where Resso is available are highly price-sensitive and eliminating the free service is likely to alienate a significant number of listeners. A Resso subscription in Brazil will cost R$16.90 ($3.35) per month, undercutting the R$19.90 one for Spotify, while in India the two premium offerings both cost 119 rupees ($1.45) a month.
“Resso’s move to a premium-only service will allow the development of a better user experience for music fans, while increasing opportunities for rights holders and artists,” ByteDance’s global head of music Ole Obermann said in the statement. “We are committed to building the world’s leading social music streaming platform.”
The music service is among a series of efforts by the Beijing-based firm to broaden its reach beyond short video streaming into areas such as mobile gaming. But ByteDance has yet to recreate the success of TikTok and sibling app Douyin — which helped it grow sales to $80 billion last year — and even shut down a marquee games studio in June as it sought to rein in spending.
Music streaming has proven to be a very low-margin business, and industry leader Spotify Technology SA is projected to be unprofitable for years to come as it battles competition from the likes of Apple Inc. and Amazon.com Inc.
Read more: Fix the Spotify Economy Before Worrying About AI: Lionel Laurent
–With assistance from Zheping Huang.
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