It’s the day the music died… for TikTok.

The social media giant announced on Tuesday that it’s calling it quits on a music streaming business that barely made it out the door, and only launched trials last year. Hey, why bother with music streamers when you have your hands all over the pipeline?

The Sound of Music

TikTok’s roots are in music and music licensing, specifically. Long ago in the forgotten era we call 2017, the premier short-form video app was Musical.ly, where users could post clips of themselves lip-syncing to their favorite tunes. ByteDance bought Musical.ly in 2017, and in 2018 it was absorbed into TikTok.

TikTok is retreating from music streaming after a very small foray into markets including Indonesia, Brazil, Australia, Singapore, and Mexico. Clearly the market that’s left behind to hoover up isn’t all that appetizing, but just because TikTok’s ducking out of the streaming market doesn’t mean it’s not eyeing Spotify’s lunch:

• According to a blog by MIDiA music analyst Hanna Kahlert, social media platforms are figuring out ways to get users to consume music directly on their platforms rather than sending them off to streaming services.
• “In coming months we will likely see social [media] attempt to monetise consumers more directly, through a number of different techniques, to better realize the value it has for creators and audiences alike,” Kahlert writes.

Speaking to The Daily Upside, Kahlert said TikTok had picked markets in which Spotify isn’t as dominant to try out its music streaming service. “It was like a trial. They were seeing, ‘Can we steal ground from Spotify there?’” Kahlert said, adding that the company may have realized consumers in those markets were already very “social-first,” and therefore it didn’t need a whole new business to compete.

Fear the Brat: Kahlert noted that TikTok’s demographics and Spotify’s subscribers aren’t necessarily the same cohort — people who pay for music streaming services tend to be older, while TikTok’s users are still a pretty young demographic. However, she does think TikTok has the potential to influence how music consumption changes among the younger generations, especially with more artists trying to figure out how to make a living. Kahlert said only 50% of artists actually make any money off streaming, and many are experimenting with social media as a way to get their fans more engaged, and make some cash. “We’re seeing a shift in how artists launch their music,” she said, adding, “Charli XCX is a social-first artist.”

Bank of America is counting on customers doing two things that may not come naturally in 2024: putting down their screens and driving over to an actual bank to speak with a human. 

This week, BofA announced it will open more than 165 new branches across 63 markets by the end of 2026, highlighting that the country’s second-largest lender still places plenty of stock in physical locations even as online banking grows in popularity. “While most clients are using our digital capabilities for their everyday banking, they are visiting our centers for in-person conversations about their more complex financial needs and advice on their life priorities and financial goals,” BofA president of preferred banking Aron Levine said in a press release.

A Personal Touch

Online banking has made many processes simpler — no more waiting in line to deposit a check when you can take a picture of it in-app. According to the Federal Deposit Insurance Corporation, by 2021, 43.5% of banked households used mobile banking as their primary method, up from 15.1% in 2017. Meanwhile, the use of bank tellers dropped from nearly 25% to just under 15%.

BofA even admits that more than 95% of client interactions take place on its digital platforms. So why more brick-and-mortar? 

• Checking and savings accounts are easy for bank apps, but many clients still like a little hand-holding when it comes to the bigger stuff. In the past year, nearly 10 million appointments were made with specialists at BofA financial centers, and around 20% of those meetings were to discuss investing options, the bank said.
• Plus, more than 12 million Americans live in “banking deserts,” which makes mobile banking their only option. BofA is looking to fill some of the gaps.

Chase What Matters: Expanding its physical footprint is also a way to ensure BofA stays competitive with JPMorgan Chase, which plans to build more branches in major cities and small-town America. In February, Chase announced that it will open more than 500 new branches and renovate about 1,700 existing locations by 2027.

With $1 trillion in assets under management, Blackstone probably deals with more spreadsheets in a day than most people see in a lifetime. Soon, the private equity giant will own the software they run on.

The firm announced Tuesday that it partnered with fellow buyout expert Vista Equity Partners to take workplace software company Smartsheet private for $8.4 billion.

Terms of Indebtment

The first half of this year was a dud for deals: It added up to $1.5 trillion in deal volume, or 41% less than the $2.5 trillion two-quarter peak experienced in Q4 2021 and Q1 2022, according to PitchBook’s Q2 2024 Global M&A Report. The Blackstone deal — fresh off last week’s rate cut — is a potential sign of the thawing of an M&A ice age.

The lower levels of M&A activity “created pent-up demand (and supply), particularly in the private equity (PE) universe,” wrote PwC in a June report, adding that rate cuts “will be welcomed by dealmakers seeking to fund acquisitions via debt.” In fact, debt was a key sticking point in the Smartsheet deal negotiations:

• Bloomberg News reported that Blackstone and Vista had to make concessions to lenders involved in a $3.2 billion financing package to support the acquisition. Those include an interest rate of 6.5% over the Secured Overnight Financing Rate, the high end of an initial borrower range of 6.25% to 6.50%.
• The terms also include a provision that would block the new owners from transferring IP to other entities out of their lenders’ reach, a sleight-of-hand trick that Vista performed with software company Pluralsight earlier this year.

If they don’t want to add to their debt, some trimming may be involved. According to Reuters, Smartsheet has recorded losses since it was founded in 2005, with the sole exception of this year’s second quarter. To be fair, the company, which says its software is used by 85% of Fortune 500 companies, has heavily prioritized growth.

Pacific Northbest: Bellevue-based Smartsheet — whose shareholders will get $56.50 per share, an 8.5% premium over the latest $52.09 closing price — will be the second Seattle-area tech firm Blackstone has acquired this year, pending a 45-day “go-shop” period in which the company can consider other offers. Blackstone acquired pet-sitting service Rover for $2.3 billion in February.