App hopes its focus on duets still sings

As industry giant drives awareness, smaller Smule tries to gain attention

A decade into making musical performance apps, San Francisco’s Smule is facing its biggest challenge — and it’s a Goliath. The owner of the industry’s top app, TikTok, has just become the world’s most valuable privately held company, China’s $75 billion ByteDance.

Smule’s last reported valuation is less than 1 percent of that: a mere $604 million — short of the $1 billion mark that would give it unicorn status.

But don’t think Smule CEO Jeff Smith is singing the blues. He’s happy for the attention TikTok has brought to Smule’s area of expertise — apps where users perform alongside recorded music.

“What I like is that I sing with people from all over

the world. We like each other’s songs.”

Judith King, Smule user

Lip-syncing may seem more popular these days, especially in the short clips TikTok users share, but Smule is betting users will pay more for an app that lets them sing live.

Smule’s been around since 2008, and its early iPhone apps such as Ocarina, which turned the Apple device into a virtual wind instrument, won praise from reviewers. But Smule’s flagship app has flown under the radar in the United States, where headlines about karaoke and lip-syncing apps have been dominated by Musical.ly, which ByteDance bought in 2017 and merged with short-form video app TikTok last year.

Smith doesn’t consider TikTok or Facebook’s Lip Sync Live, a feature on the social network where users can record videos of themselves mouthing the words to songs, as competition.

“I think TikTok, Facebook, Musical.ly have built some fun applications to allow people to lip-sync and dance,” Smith said. “Smule in contrast is allowing people to create music, and so it’s not people lip-syncing and dancing, it’s people singing and playing.” He says that Smule caters “more toward people who want to actually experience music rather than create some fun 15-second clip and share that with friends.”

On Smule, users choose from a catalog of music and perform duets with other users around the world or sing along to tracks recorded by artists such as Demi Lovato and Nick Jonas. They can record the karaoke sessions, store them online and share them across social media.

Smule has about 2 million paying subscribers who shell out an average of $8 a month for access to the full catalog, storage, and audio and video filters. The app has more than 40 million users active in a given month, Smith said, and about 95 percent of its revenue comes from subscriptions. TikTok makes money through in-app purchases, with worldwide users spending $3.5 million on those purchases in October 2018, according to Sensor Tower. Users purchase coins that can be used to send gifts worth real money to video creators.

The idea of live singing is to bring music back to its roots, where it’s more participatory, Smith said.

In the field of karaoke, Smule competes more directly with apps from WeSing and Starmaker. Such apps have become more popular over the years, largely because more people are watching video on mobile than ever before and there’s a huge demand for short clips, according to Lexi Sydow, a market insights manager at mobile data and analytics provider App Annie.

Smith said the competition is helping Smule — at least on the financial front.

“It’s creating a lot more awareness,” he said. “We’re getting a lot more love from investors and investment banks.”

In October, Smule raised $20 million from Times Bridge, the investment arm of India’s Times Group. The deal will allow Smule to expand in India, and Smith said he expects the company may strike similar deals in other regions to build recognition.

Smule ranked 68th in 2018 among all non-gaming apps across Apple and Google’s mobile app stores, according to App Annie. TikTok was ranked fourth.

Judith King, a 53-year-old Navy veteran from Sault Ste. Marie, Mich., has been using Smule for about two years as a way to work through posttraumatic stress disorder.

Her Department of Veterans Affairs therapist recommended she “do things to make me feel better, and singing is one of them,” King said. She hadn’t used karaoke apps before and now subscribes to Smule for $9.99 per month.

“I was interested because I hadn’t seen anything like it,” King said. “And what I like is that I sing with people from all over the world. We like each other’s songs. We get invited to sing other songs.”

King may be an outlier. Though the app is based in San Francisco, Asia is Smule’s biggest market, followed by Latin America, North America and Europe. Smith believes the reason the app isn’t more popular in the U.S. is that Americans are more embarrassed to sing and perform.

Another theory is that karaoke has simply run its course in America. In his 2008 book “Don’t Stop Believin’,” Brian Raftery wrote, “Karaoke now enjoys a sort of cultural centrism: It’s not exactly cool, but it’s not exactly uncool either.”

Mexico, Smith said, is a major market for Smule. “They know better how to have fun than we do,” he said.

Sophia Kunthara is a San Francisco Chronicle staff writer. Email: sophia.kunthara@ sfchronicle.com Twitter: @SophiaKunthara

Photos by Scott Strazzante / The Chronicle At Smule company headquarters in San Francisco, the Smule app shows users creating a duet live.

Jeff Smith is CEO of Smule.

Scott Strazzante / The Chronicle Smule, which has been around since 2008, says it has more than 40 million users active in a given month, and about 95 percent of its revenue comes from subscriptions. Users choose from a catalog of music and perform duets with other users around the world or sing along to tracks recorded by professionals.