Founding
Musical.ly Inc. was founded by Alex Zhu and Luyu Yang in Shanghai, China.[7][8] Before launching Musical.ly, Zhu and Yang teamed up to build an education social network app, through which users could both teach and learn different subjects through short-form videos (3–5 minutes long). After having investors fund this venture, it took them about 6 months to build the product. However, once launched, this online self-learning platform did not get enough traction and the content produced was not engaging enough. They were unable to secure further investment, and after losing traction, they shut the service down. Zhu & Yang then began searching for a new business model in the consumer, social, and multimedia space. It led to them focusing on video content again, this time shorter (15s–60s), which they thought would help keep the content light and playful. They let users select music snippets for their videos, which helped build a very small user base. Eventually the product pivoted to lip sync snippets after noticing a spike in downloads Thursday evenings during and after episodes of the Spike celebrity game show Lip Sync Battle.[3] The team's judgment at the time was that long music videos were not very widely popular before, and the fundamental reason was that although people are willing to watch short videos, the supply was small, as there were too few people who were willing to shoot and share. Therefore, Musical.ly's entry point was to introduce a large amount of music, so that everyone can easily integrate music into the video, and a video would become more fun.[8] The first version of Musical.ly was officially launched in August 2014.[3]
Growth
At the beginning, the team launched the app in both the Chinese and American markets. However, compared to the domestic market's tepid reaction, their app was particularly popular in the American teenager market. As their team size was small, they decided to mainly focus on the U.S. market. The product quickly accumulated a group of loyal users, and although the total number of the users continued to be not very large, the activity level of the users was very high.[8]
In June/July 2015, the app began to attract millions of users, allowing "musers" (Musical.ly users) to lip-sync to millions of songs. Musical.ly climbed up to the number 1 position in the iOS App Store,[9] becoming the most-downloaded free app in over 30 countries, including the US, Canada, UK, Germany, Brazil, the Philippines and Japan. In May 2016, Musical.ly reached 70 million downloads, with over 10 million new videos posted every day.[3]
In June 2016, Coca-Cola launched its #ShareACoke campaign on Musical.ly, which introduced Musical.ly's "User-Generated Ads" model.[10]
Merger into TikTok
On November 9, 2017, the Wall Street Journal reported that Musical.ly Inc had been sold to Bytedance Technology Co., which operates the program Toutiao, for as much as US$1 billion.[12] However, Recode estimated that the sale would be for around US$800 million.[13] On August 2, 2018, musical.ly and TikTok merged, with existing accounts and data consolidated into one app, keeping the title TikTok.[14] This ended musical.ly and made TikTok a worldwide app, excluding China, since China's separate version of TikTok is called Douyin.[15] At first, the musical.ly features were still present on the TikTok app, including crowns (musical.ly's unique verification system), page categories, and duets. Eventually, TikTok removed crowns and replaced them with check marks. They also got rid of page categories and started implementing many other features, including LIVE broadcasts, favorites, reposts, stitches, voice effects, filters, and more.
