MBW Explains are a series of analytical features that explore the background behind major music industry stories and suggest what might happen next.
what’s happened?
The super-popular short-video app TikTok has become, without a better word, a major player in the music business.
The app has been the seed of some of the biggest musical phenomena in recent years, including the Lil Nas X blockbuster. old town road.
As was the case with Fleetwood Mac, it has occasionally amazed observers with its ability to revive classic songs and turn them into hits again. dreams and simple plan i’m still just a kidbreathed new life into their second hits, 41 and 18 years respectively since their first release.
According to TikTok, 13 of the 14 number one hits on the US Billboard Hot 100 in 2022 were “powered by significant viral trends on TikTok.”
At this point, there is no doubt that TikTok has had a major impact on recorded music in terms of which artists and which songs become famous. But even if this observation is reversed, it still sounds true that music is the main reason for his rising popularity on TikTok.
No wonder the big record labels are publicly hinting at, and unofficially pushing, to expand TikTok’s ad revenue pie.
Two questions have haunted this conversation over the past few months. To what extent is TikTok willing to pay extra to license copyrighted music for videos that users post on its platform? And how far will TikTok resist attempts to increase revenue sharing? But are you going to replace major label and indie label music with your own music ecosystem instead?
We got a lot closer to answering these questions last week when TikTok owner ByteDance announced Ripple. Ripple is a free-to-use music production app with two main features: an AI melody-to-song generator and virtual recording. studio.
The Melody to Song feature allows users to hum a melody directly within the app, and Ripple will build an instrumental music track around it that is the same length as the original hummed melody.
(In response to growing concerns within the music industry about training AI models on copyrighted music without permission, ByteDance has told MBW that Ripple said to have trained
The virtual recording studio works much like other portable digital audio workstations such as Splice, BandLab’s Cakewalk, and Apple’s GarageBand.
Ripple users will be able to upload their musical creations to TikTok and other social media platforms. It will be released to a small number of beta testers via invite, at least for the time being.
For many observers, the idea that TikTok wants to enter the increasingly crowded arena of AI music generators and digital audio workstations for its own sake is incomprehensible. But if TikTok is trying to replace major and indie label music with music you don’t have to pay for, it makes sense.
What is the background?
Ripple’s release follows negotiations between TikTok and major record labels over the size and structure of payments video apps will pay for the use of copyrighted music in videos uploaded to TikTok. done in the middle.
So far, TikTok’s deal with the record company has been a so-called “buy-out” deal, in which the social media site pays a lump sum for two years of use of the licensed music across the platform.
The current deals with record giants Sony Music, Universal Music Group and Warner Music Group were signed from November 2020 to February 2021, so time is running out. . And the majors reportedly want to replace lump-sum deals with a portion of advertising revenue from TikTok’s music-driven videos.
But TikTok has been tough in many ways.
Earlier this year, it was reported that TikTok was disabling the ability for certain users in Australia to add major-label licensed music to their videos. Additionally, certain uploaded videos featuring these tracks will be muted.
Officials told MBW that the move was intended to give TikTok more leverage in negotiations with record labels. TikTok could argue that music matters if experiments show little to no significant drop in user engagement. no A key part of the TikTok experience.
TikTok reportedly lost a user during the experiment. – Evidence that music is teeth It’s a vital part of TikTok, as evidenced by ByteDance’s own actions.
“We have many people [working at TikTok] Coming from record labels, publishers and institutions, we understand how complex, capital intensive and professional that business can be. It doesn’t fit our strategy of being a record label. “
Ole Oberman, TikTok
In Spring 2022, TikTok will launch its own music promotion and distribution platform called SoundOn. In addition to distributing on TikTok, SoundOn can also distribute music to other platforms such as Spotify, Apple Music and Instagram.
You can also distribute to Resso, ByteDance’s social media platform, expressly for music sharing. The app is currently available in Brazil, India and Indonesia, but Ole Oberman, TikTok’s global head of music business development, told MBW in May that the app will be available globally. It is the company’s ambition, he said.
The platform initially launched in the US, UK, Brazil, and Indonesia, but is now expanding to Australia, New Zealand, Canada, and Mexico. SoundOn pays the creator his 100% of the royalties generated by the music in the first year and he pays 90% thereafter. This is a pretty good amount when compared to traditional music labels.
SoundOn struck an exclusive deal with Death Row Records and Snoop Dogg earlier this year, giving TikTok a big publicity boost with the label’s catalog for a week only before returning to the major streaming platform.
Now, with the release of music-making app Ripple, it’s hard to avoid the impression that TikTok is positioning itself as an all-in-one shop for music creators. We use Ripple to generate songs and convert them into tracks, which we pass to SoundOn for him to distribute on TikTok and other platforms. I don’t want labels like major, indie, etc.
But the company insists it has no intention of becoming a music label.
“TikTok is not going to be like a record label,” Oberman said in an interview with MBW.
“SoundOn was born from one main purpose. [we have] At TikTok, we plan to work with our creator community to help them earn money, get discovered, and build partnerships and relationships with brands,” Oberman said.
“SoundOn is not only the answer to all of that, but how do we deal with the fact that so much unsigned, unknown, or unidentifiable music is pouring into TikTok? How can we improve it for
Furthermore, he added: “We have many people [working at TikTok] Coming from record labels, publishers and institutions, we understand how complex, capital intensive and professional that business can be. It doesn’t fit our strategy of being a record label. “
what happens next?
In the coming months, major record companies (Sony, Universal, Warner) could announce news about new deals with TikTok.
It will be interesting to see if these deals are repeats of agreements TikTok previously made with the two companies, given the majors’ reluctance to continue with the “buyout” model, but the details of those deals have not yet been made public. It’s unclear if it will. is anyone’s guess.
And how much TikTok will concede to the majors will depend on a number of factors, including the outcome of the experiment in Australia.
Preliminary reports suggest that many young Australian users were blocked from using licensed music, causing them to use the app less and even quit altogether. If this is true, it will give the record companies a lot of influence.
“We are confident that even if we were forced to remove our catalog or parts of our catalog, we would still be able to maintain a compelling service for our users.”
Ole Oberman, TikTok
However, SoundOn and Ripple performance will also affect this. If these apps prove to be popular with TikTok users, it will support the claim that users of the platform can (and do) generate their own music, so they don’t have to rely on licensed music. Based on that, ByteDance will have reason to keep fighting the music industry hard. Music from major record companies.
It will be more than subscribers. For TikTok to succeed in this dramatic change in how it uses its platform, people are not just signing up to Ripple and SoundOn, they’re actually producing music and distributing it. I’ll have to check the evidence. And most importantly, his TikTok with this music has gone viral and the song itself has become popular.
It’s a tall order, but TikTok has touted some of SoundOn’s early successes, such as the success of 20-year-old Canadian Katherine Lee, who, according to a TikTok press release, will release an EP through SoundOn in 2022. and has been streamed to 49 millions of plays on Spotify alone.
Nevertheless, big record companies have their own clout and can refuse to license music to TikTok if they don’t get a satisfactory deal. Depending on the company, this could mean the loss of 15% to one-third of the major label music available on TikToker.
That could seriously impact the TikTok user experience, but Oberman doesn’t seem particularly concerned about such scenarios.
“Even if we were forced to remove the catalog or parts of the catalog, we are very confident that we would still be able to maintain a compelling service for our users,” he declared in May.
Who knows if it’s bravado before negotiating with record labels or a sober assessment of TikTok’s place in the marketplace and culture.
lastly…
All of this comes at a time when rising tensions between China and the West are making TikTok’s future uncertain.
TikTok, the world’s most popular Chinese-owned app, has drawn criticism across North America and Europe.
Concerned about ByteDance’s close ties to the Chinese Communist Party (which could mean the Chinese government has access to detailed user data around the world), many governments have banned TikTok on government-issued devices. are doing.
Among them are the United States, United Kingdom, European Union, Canada, Australia, etc. Some countries, such as Afghanistan and India, have banned TikTok outright, as has Montana in the United States, but TikTok has vowed to fight the ban on free speech grounds.
The US House Foreign Relations Committee has given President Joe Biden the power to ban TikTok nationwide after TikTok CEO Shaw Ziechu was shot in front of Congress this spring for four and a half hours. Submitted a bill to give.
But the bill hasn’t made much progress since, and many critics say the law targeting specific companies is unusual and constitutionally problematic.
Yet, unlike other platforms, TikTok is at the center of a major geopolitical shift in the world today.
Bizarrely, TikTok’s potential campaign to grow into a music giant depends on the ongoing US-China trade war and developments over Taiwan’s status.
This puts a big question mark on its future and even licensing negotiations with majors and platforms. TikTok may soon become a major music production tool competing with the likes of Universal and Sony. Or TikTok could die soon, or be somewhere in between.
With so many possible outcomes, adding uncertainty to all of this can keep anyone in the music business awake at night.global music business
