TikTok’s parent company ByteDance is in talks with record companies about expanding its dedicated music-streaming platform into more than 12 new markets according to a The Wall Street Journal report on Wednesday (October 12).
The company seek to take TikTok’s sister app, Resso, out of its three current marketplaces – Brazil, India and Indonesia – and into the new territories excluding the United States, reports the WSJ, citing sources.
Music Business Worldwide also reported that “ByteDance’s plan is meeting some resistance from certain music rights-holders” who are questioning how much money TikTok pays out.
Earlier this year a revenue share agreement was reached between Meta and the top rights-holders Universal Music Group and Warner Music Group, for certain user-generated video types on Facebook. The launch of Facebook’s ‘Music Revenue Sharing’ was initially US-only, but earlier this month expanded globally as per a Meta announcement on October 5.
Currently, TikTok’s licensing agreements with music rights-holders are based on so-called “buy-out” deals, which often last for two years – under which ByteDance pays rights-holders an upfront check for a blanket license for the use of music in short-form video clips.
WSJ, also reports that Resso’s payouts, are similar to Spotify – operates both an ad-funded and subscription tier.
Sony Music Entertainment has in the past refused to renew its licensing agreement with Resso, resulting in its catalog being pulled from the service in all three of its current territories, per WBW.
TikTok Distribution
World Music Views discovered that TikTok is hiring music team in places like New York as they expand their distribution business. We previously reported that TikTok is now a full on digital music distributor where artist and rights holders can release their music on all digital platforms via their new service “Sound on”. If that’s not enough their latest addition to the service is “Pre-Release”; a new self-service feature that allows artists and rights holders to give TikTok listeners exclusive access to clips in advance of releasing their tracks.
SoundOn was launched in March as an initiative for independent acts to upload music directly and earn 100% royalties via direct payment. It can also distribute to other services such as Spotify, Apple Music and Instagram.
Pre-Release is a new self-service feature that enables artists to give TikTok listeners exclusive access to clips in advance of releasing their tracks. It aims to create a marketing opportunity to share a clip early and build momentum for viral moments, while encouraging fans to pre-save songs ahead of their official release.
A&R for TIKTOK’s new distribution/artist’s service company Naj Mullah said we will never see anything like this again in a tweet, “TikTok started a music distribution / artists service department. I’m the U.S. A&R manager, I promise y’all will never see anything like this again. TikTok has the highest DSP conversion rate of any social platform, & numbers aren’t close. Independent artists let’s break records!”
“Pre-releasing a song is a great way to test a track before its full launch,” said TikTok. “Artists can gauge audience reaction and find the most viral song clips to maximise sharing, listening and interaction.”
Naj followed up with a tweet saying that major labels are “hounding their artists to be on TikTok” for more than one reason but mainly because the platform is breaking records.
In a September interview with Anthony Miller of Entertainment Report, U.K. dancehall rapper Stefflon Don said that TikTok is the reason Dancehall’s future is exciting.
“Dancehall is huge, especially since TikTok. I think when a Dancehall artist drops a song, it transitions to the world through TikTok straight away, like it’s instantly. Before it would have to travel, you’d have to be at a Dancehall party to hear certain songs, or you’d have to have Jamaican friends to hear certain songs. Now, it don’t matter what country you’re from- If you’re on TikTok, you’re going to hear the baddest Jamaican songs,” She told Miller.
While YouTube is still in the lead miles ahead as the world’s largest video streaming platform, with more than 2 billion users every month, TikTok revealed last September that it already has over 1 billion global monthly active users (MAUs) and was predicted to surpass that number this year.
In September 2020, YouTube hit back at TikTok’s closing in by launching its rival Shorts platform in India, the US, and expansions into Latin America, Canada and the UK. Shorts videos can still only be a maximum of 60 seconds long.
TikTok and YouTube aren’t just competing for users and creators, they’re also competing for advertising revenue as reported in Music Business Worldwide.
YouTube generated USD $8.63 billion in advertising revenues in Q4 2021 (ended December) and over $28 billion across the course of 2021.
TikTok, meanwhile, generated USD $4 billion in ad revenues last year, but aims to triple that figure to $12 billion this year, according to China based news outlet LatePost.
TikTok said that SoundOn is the only platform that allows artists to pre-release their songs to TikTok ahead of their official launch. Artists can create their own video and fans can duet, stitch or create videos to share with their friends. SoundOn pays out 100% royalties to music creators in the first year and 90% after that and provides a range of promotional tools and support. In a statement, TikTok said that SoundOn is “designed to empower new and undiscovered artists, helping them develop and build their careers”.
According to an MRC Data survey in 2021, 63% of TikTok users heard new music on the platform that they had never heard before, while 67% said they are likely to seek out a song on a music streaming service that they heard on the app first.
There is also a resurgence of interest in older music too. Reggae artist Ini Kamoze 1995 hit Here Comes The Hotstepper recently went viral on TikTok videos using the song and hashtags #hotstepper and #herecomesthehotstepper. Subsequently the song entered the Billboard R&B/Hip-Hop Digital Song Sales chart in February this year. It peaked at No. 7 on the chart, before slipping to No. 9 and then to No. 25. It peaked at No. 1 on the US iTunes Reggae song chart and has since remained in the top ten.
The album Here Comes The Hotstepper also re-entered the Billboard Reggae Album chart at No. 10 in February for two weeks as a result of TikTok’s effect on the song. This after it had debuted at No. 1 on the chart in 1995.
TikTok is the 6th most popular social media network in the world according to data collecting website Statista and Reggae/Dancehall music is heavily used genre on the platform as revealed in a music report by TikTok last year.
TikTok has over 689 million active users and in their 2020 music year-in-review report, they revealed that more than 176 different songs surpassed 1 billion streams including Shaggy and Conkorah’s remix of “Banana.”
The remix of Conkarah and Shaggy’s Banana jumped 250 thousand views within a day.
Laa Lee had a viral challenge with his song Tip Innnah It streamed almost 13 million times with users making over 14 thousand videos doing the #tipinnahitchallnege at a rate of over 500 thousand streams per day. Compared to YouTube where the David Island and Everton Gentles music video for the same song only has 7 million views since December 2020.
Reggae-Dancehall music is not climbing as fast as Hip Hop which is the number one genre on TikTok but ti is growing.
In 2020 Drake’s Toosie Slide, generated a billion views in just three days, and WAP by Cardi B & Megan Thee Stallion did the same in just two weeks.
Although Hip Hop is the dominant genre with over 50 percent consumption, Music editorial lead at TikTok William Groger told Variety Magazine that, “There is also a list of ‘Unexpected Hits and Niche Discoveries’, where by TikTok’s community helped shape internet and IRL culture with these unearthed gems.”
Another highlight from report is that more than 70 artists have broken into the industry on TikTok with major record label deals.
Mura Masa’s ‘blessing me’ With Skillibeng, Pa Salieu Is TikTok’s First Song Of Summer 2022.
Over 170,000 “blessing me” videos have been uploaded by the creators on TikTok, most of which feature use Skillibeng’s verse.
Although not always the case, many of the successful songs on TikTok can be as a result of artists who use the platform to lead trends said William Gruger to Variety Magazine, “A major common factor among artists who broke and received deals from their activity on TikTok is that they are major users of the platform as well. These artists are engaged with their TikTok followers, leaning into trends on the platform and building relationships with audiences who support their music. Star examples of this include 24kGoldn who earned his first #1 hit on the Billboard Hot 100, Flo Milli’s breakout ‘May I,’ which inspired 1.3M creates, and Panama native Latin superstar Sech, who has over 1.7M followers earned from his frequent reaction duets and charming dance moves.”
Advertising Exec and former record label executive Steve Stoute said on the Earn Your Leisure Podcast recently that, “Really what you want is TikTok to be the place where you promote the song and then if you could go ‘you like that?’ you can listen to the full length song on Apple Music and one of these streaming platforms”.
Brands using TikTok
LifeSpan surpassed 15 billion impressions in less than a month according to Google Trends. The almost 100-year-old drink company became the talk of the world when TikTok creator Nathan Apodaca @420doggface208 casually drank a cran-raspberry drink on his way to work. After becoming famous due to the video, The Miami Herald reported that “Nathan “DoggFace” Apodoca is selling his iconic video as an NFT, or non-fungible token, in an auction…, his manager told McClatchy News”.
Since then other companies have encouraged workers to post videos to TikTok while at work.
In one ByteDance job ad it said: “Resso or TikTok Music, is a music app for Gen Z that launched [in] 2020 in India, Indonesia and Brazil”.
Last year, YouTube generated $6 billion for the music industry out of the video-sharing website’s $30 billion revenue.
“We estimate TikTok monetization is [currently] a fraction of this,” BPP Exane said, adding that TikTok’s revenue is already likely to surge on ad revenues, bringing a major source of upside for labels, even before the company officially launches its own music-streaming app.
World Music Views
