The platform trails others in usage in the US, but has a dedicated core audience
Musical.ly, the lip-synching app that’s developed a dedicated audience among teens and young adults in the US and Europe, has found a new owner.
Chinese firm Bytedance, owner of the country’s massively popular news aggregation platform Toutiao, announced last week that it was purchasing Musical.ly for an undisclosed amount, though media sources put the purchase price somewhere between $800 million and $1 billion.
Musical.ly was actually founded by two Chinese entrepreneurs in 2014. But it’s found its core user base in the US, especially among younger demographics. These users were initially drawn to the platform’s ability to generate videos up to 15 seconds showing them lip-synching to hit songs that can then be shared with friends. Musical.ly is now trying to expand its content offerings to include other types of short-form video content, such as comedy and magic.
The platform claims to have 200 million registered users, but it likely has a much smaller number of daily active users (DAUs). Data indicates it still trails dominant social and digital media platforms in terms of adoption in the US.
According to March 2017 data from Defy Media, just 14% of US teen and young adult internet users used Musical.ly, trailing nearly every other platform included in the poll.
Similarly, data from Edison Research found just 6% of US smartphone owners polled in January used the service.
A September article from Digiday reported that Musical.ly had three main ad formats: a vertical video ad, a sponsored post from an influencer and a so-called custom challenge, in which a brand issues an entreaty to users, often through an influencer to respond to a prompt. Ad buyers interviewed by Digiday generally reported that the platform’s ad tools still needed to be developed, and that ad rates were comparatively high.
But that doesn’t mean advertisers would do well to ignore Musical.ly altogether.
“Despite the fact that Musical.ly’s audience isn’t incredibly large, that audience is there for a very specific reason,” said Tom Hyde, content director at agency Big Spaceship. “The platform enables their audience to express themselves while seamlessly integrating products or brands, which can generate a huge amount of user-generated content.”
What Bytedance—and, by extension Toutiao—might bring to the table through its purchase is less clear. The service has some 120 million monthly users, and was the top-ranked news app in terms of reach in China as of mid-year, according to data from Cheetah Lab. The company is known for using artificial intelligence to help boost its usage figures, and in a statement the company said it would attempt to do the same for Musical.ly.
Bytedance also said it would allow Musical.ly to operate as an independent unit, much as it did when it acquired US-based video platform Flipagram earlier this year.