Musical.ly’s video social network app has skyrocketed last year, raising $100 million at a $500 million valuation and reaching 40 million monthly active users. And yet, the app is mostly used by teens, a user base with a short attention span. Musical.ly is slowly fading away from the top charts of the App Store and Play Store.
So the company is trying something new. Until now, Musical.ly partnered with 7digital, a primarily B2B music streaming and downloading company. 7digital negotiates deals with content companies so you don’t have to. This way, companies like Samsung, Canonical/Ubuntu and Musical.ly can provide a music streaming service without doing the heavy lifting.
7digital’s catalog is available in around 80 countries while Apple Music is available in more or less 113 countries. By switching to Apple Music as the song snippet back end, Musical.ly can launch in new markets.
But that’s not all. While terms of the deals are unknown, this deal looks like a great opportunity to promote Apple Music. Apple’s bottom line isn’t going to change over night with this kind of deal. But it could lead to more Apple Music subscriptions.
Apple Music is available by default on every Apple device, and you can download a free app on Android (side note: is it less buggy than it used to be? I haven’t tried it lately). But Apple Music is still lagging behind Spotify. Apple Music has 20 million subscribers, Spotify has 50 million paid users — and Spotify’s growth doesn’t seem to be slowing down.
So if you are an Apple Music subscriber, you’ll be able to listen to full songs on Musical.ly, turning Musical.ly into a sort of music discovery service.
Musical.ly will also promote Apple Music in its app, which could create a new revenue stream for the app thanks to affiliate fees. And if this works, I could see Apple acquiring Musical.ly and promoting it heavily to iOS users.
Update: 7digital CEO Simon Cole says in a statement that Musical.ly’s relationship with 7digital is not ending. Cole also says that Musical.ly is working with “a number of suppliers,” including 7digital. Maybe the Apple Music integration is going to focus mostly on promoting Apple Music instead of iTunes purchases as Musical.ly currently shows a button to buy a song on iTunes.
7digital has just signed a renewal agreement with musical.ly which will see us not only continue to power the service, but to do so in double the number of territories – we now work with musical.ly in 60 countries worldwide. musical.ly is one of the world’s fastest growing social video networks and as such, the company works with a number of suppliers and 7digital will continue to be one of them – we have in no way ended our working relationship.
Update #2: Musical.ly just sent out a push notification saying that you can now stream full songs using Apple Music if you’re a subscriber. Apple Music is replacing the iTunes button. It’s unclear if Musical.ly is still using 7digital for the music snippets.