TikTok parent company Bytedance hasn’t published official financial results, but Reuters has an exclusive report claiming insight into the company’s “better than expected” performance in the first half of 2019. It claims that Bytedance generated revenues of between 50bn and 60bn yuan ($7bn-$8.4bn) in the first six months of the year, and that while the company recorded an (unquantified) loss for the period, it “posted a profit in June and was confident of making a profit in the second half of the year”.
Comparisons are tricky since Bytedance isn’t a public company required to publish its financial results. In March, tech-news site The Information claimed that Bytedance’s revenues were $7.2bn for the whole of 2018 – so the Reuters figures do indicate sharp growth – but also that the company’s losses reached $1.2bn in 2018. A profitable second half of 2019 would represent quite the turnaround on that score, then.
The majority of Bytedance’s revenues are still made within China, although it’s starting to up its focus on making money from ads within TikTok internationally. Those 2018 losses were partly about a huge marketing push for that app: an advertising spend reported (by the Wall Street Journal no less) to have been around $1bn in 2018 alone. In October that year, Bytedance raised a $3bn funding round valuing the company at $75bn.
Reports of Bytedance’s bumper first-half of 2019 come as the company continues to prepare for the launch of its new music-streaming service, which is expected to major on social features, while having an initial emphasis on emerging markets. The timing of the report about Bytedance’s robust financials may be slightly awkward for its licensing negotiations with music rightsholders for that new service (as well as for TikTok) – labels sitting down for the latest talks will be well aware of its growth and profitabilty.
Then again, if Bytedance’s burgeoning business means it can commit significant resources to getting a new music-streaming service off the ground that is carving a new niche for itself in the market, it could smooth those licensing negotiations in other ways. We await the official announcement of the music-streaming service – but also of any agreements reached for TikTok – with keen interest.