TikTok sister music app Resso shuts down free tier, goes subscription-only

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In October, a Wall Street Journal report poured fuel on the fire of escalating commercial tensions between TikTok, its parent company ByteDance, and the major music companies – Universal Music Group, Sony Music Group, and Warner Music Group.

Amid debate over the financial rewards said majors were being paid by TikTok for use of their music on the platform, the WSJ turned its attention to TikTok’s sister music app, and Spotify rival, Resso.

The newspaper reported that ByteDance was looking to expand Resso outside of the three markets in which it was currently operational – India, Indonesia, and Brazil – into a dozen new global territories.

But the report, published a month after Sony Music pulled its catalog from Resso, highlighted an additional area in which the majors were dissatisfied with ByteDance: the number of users of Resso’s free/ad-supported service who were being upsold into its Premium tier.

The WSJ reported that Resso’s conversion rate (from free users to paid users) was “in the low single percentages”. That compared to around 45% globally at Spotify.

What action can ByteDance take to improve Resso’s paltry free-to-paid conversion? A dramatic one – because today (May 3) Resso has confirmed it’s shutting down its free tier entirely.

In a message sent to its users this morning, Resso announced that will close its free tier next Thursday (May 11) as it transforms into a premium-only service.

Existing users of Resso’s ad-supported tier will from that date be given a 30-day free trial to the new premium service.

Confirming the news today, ByteDance’s Global Head of Music, Ole Obermann, said in a statement:  “Resso’s move to a premium-only service will allow the development of a better user experience for music fans, while increasing opportunities for rightsholders and artists.

“We are committed to building the world’s leading social music streaming platform and ensuring artists and music creators can rightly benefit from its growing success.”

Resso’s premium tier subscription will cost R$16.90 per month in Brazil (USD $3.35) – cheaper than the equivalent Spotify subscription in the territory (R$19.90) – while in India it costs 119 rupees ($1.45) per month on iOS, the same price as Spotify.

Today’s news comes eight months after another major music streaming service in India, Gaana, shut down its free tier.

Gaana, which at the time had more than 100 million users, pulled its ad-supported service on September 9 last year.

Reuters reported that shortly before going premium-only, Gaana had sent an email to music partners confirming that a deal which would have seen the company taken on significant investment had “fallen through”.

The previous month (August 2022), Airtel was reported to be in ‘serious talks’ to buy Gaana. 

Airtel and Gaana had reportedly been negotiating a potential deal for several weeks.Music Business Worldwide