MBW Explains is a new series of analytical features in which we explore the context behind major music industry talking points – and suggest what might happen next.
A double-whammy of TikTok news this week has turned up the heat on tensions between the ByteDance-owned platform and the major record companies.
First, TikTok announced that it had struck a deal with Snoop Dogg for a major streaming exclusive. The Doggfather is bringing the Death Row catalog – which he acquired last year – back to streaming services.
Said catalog, however, will appear only on TikTok first, via a windowed first-week exclusive. The majors, ever since that Frank Ocean fallout in 2016, have almost uniformly sidestepped one-week windowing strategies.
Perhaps of more concern to the majors: Snoop Dogg has inked a go-forward agreement to directly distribute the Death Row catalog to ByteDance products (including TikTok and Resso) via TikTok’s SoundOn.
Not via Universal’s Virgin Music Group; not via Sony‘s the Orchard; not via Warner’s ADA. Via TikTok’s SoundOn.
By striking a distribution partnership with a superstar artist in control of an iconic catalog of recorded music, TikTok is arguably striving to prove that it can sign major partnerships, and create major catalog music moments, without a major label’s involvement.
All of that is happening just as the majors themselves lambast TikTok for its recent shenanigans in Australia.
This week, the Australian Recording Industry Association (ARIA) – Oz’s equivalent to the USA’s RIAA – slammed TikTok parent ByteDance for its decision to limit access to major-released music for select Australian creators and users on the TikTok app.
ARIA represents the interests of the recorded music industry in Australia, including the interests of the three major record companies: Sony Music Entertainment, Warner Music Group and Universal Music Group.
TikTok’s move to restrict access to some music in Australia – and effectively ‘mute’ some major record company-signed tracks on existing videos – is, according to TikTok itself, a “test” by ByteDance to see how it affects user behavior.
Responding to TikTok’s move in Oz, ARIA’s CEO, Annabelle Herd, said this week: “It is frustrating to see TikTok deliberately disrupt Australians’ user and creator experience in an attempt to downplay the significance of music on its platform.
“After exploiting artists’ content and relationships with fans to build the platform, TikTok now seeks to rationalise cutting artists’ compensation by staging a ‘test’ of music’s role in content discovery.
“TikTok’s Chief Operating Officer Vanessa Pappas said that 80% of content consumed on TikTok is programmed by algorithms. If this is the case, then it’s difficult to trust that this is a true test. TikTok can set its Australian algorithm upfront to – within parameters they define – deliver the results they want. TikTok should end this ‘test’ immediately and restore music access to all users and creators.”
Annabelle Herd, ARIA
Added Herd: “This ‘test’ is presented as an effort to analyse, improve and enhance the platform’s wider sound library, but as little as five months ago, TikTok’s Chief Operating Officer Vanessa Pappas said that 80% of content consumed on TikTok is programmed by algorithms.
“If this is the case, then it’s difficult to trust that this is a true test. TikTok can set its Australian algorithm upfront to – within parameters they define – deliver the results they want.
“Australians deserve better. TikTok should end this ‘test’ immediately and restore music access to all users and creators.”
WHAT’S THE BACKGROUND?
MBW’s sources tell us that TikTok is aiming to use the results of its test in Australia in its licensing negotiations with the record companies.
We understand that TikTok’s hope is that the removal of major label music in Australia for certain users won’t significantly impact the engagement of those users on the service.
TikTok hopes to then use this as a case study during its major record company negotiations in an attempt to ‘prove’ it can live without major-released catalog.
The addition of Snoop Dogg to TikTok’s own distributed catalog (via SoundOn) only stands to make that argument more colorful.
“We will fight and determine how our artists get paid and when they get paid [from TikTok], in the same way that we have done throughout the industry for many years.”
Sir Lucian Grainge, Universal Music Group, speaking in October
All of this comes after the leaders of major music companies – including Sir Lucian Grainge at Universal Music Group – seemingly made clear during 2022 their dissatisfaction with the amount of revenue being paid out to music rightsholders by TikTok/ByteDance, and their hope to improve it in 2023.
Speaking to analysts on Universal Music Group‘s Q3 2022 earnings call in October last year, Sir Lucian Grainge told analysts: “When you look at what the funnel that TikTok has, when you look at the billions of views, the rate at which the company has grown, we will fight and determine how our artists get paid and when they get paid, in the same way that we have done throughout the industry for many years. I have seen this movie before, I know the ending.”
WHAT HAPPENS NOW?
Last week, MBW asked if TikTok was about to “pull off a heist” on the music industry, by successfully replacing major record company music on its app with a combination of independent music uploaded via its SoundOn service, and AI-generated tracks.
The new addition of the Death Row catalog to SoundOn’s distributed musical arsenal – amid a boom in listening for ‘shallow catalog’ hip-hop music – only accentuates that idea.
As far as TikTok’s “test” in Australia goes, the platform now has two obvious options:
- Continue with the “test” for as long as it was originally planning to, and ignore the damning comments from ARIA (on behalf of the majors);
- End the “test” and restore access to all licensed music for all users on the platform, including major label content.
A FINAL THOUGHT…
It’s always worth remembering that there are bigger existential questions surrounding dangers to TikTok’s future than its relationship with the music industry.
Three years ago, then-President Donald Trump flirted with the idea of banning TikTok in the United States, citing privacy concerns and raising suspicion over TikTok/ByteDance’s relationship with the Chinese Communist Party (CCP).
2023 is set to be another major year in US politics, when Presidential hopefuls including Trump and his Republican leadership rival, Ron DeSantis (pictured inset), are expected to launch campaigns they hope will carry them to the White House during the US elections of 2024.
Could TikTok (and its relationship to the CCP) once again become locked in the campaigning crosshairs of either of these candidates, or their fellow Presidential wannabes on the Democrat side of the aisle?
And if the prospective banning of TikTok becomes a priority ticket issue for Trump, DeSantis et al, what could that spell for the future of the app in the States – with or without major record company music?
Keep an eye on this story: DeSantis, currently governor of Florida, yesterday (February 15) announced a proposal that would block state and local government devices (including those operated by students attending a public school or state university) from being able to access TikTok, reportedly citing concerns about the app’s ties to the Chinese government.
Back in September 2020, when the prospect of a temporary US ban of TikTok from the Trump administration was becoming headline news, the app’s then-interim head (now COO), Vanessa Pappas, made a startling estimate: if a US ban of TikTok was in place for six months, over 80% of its daily users would not return to the platform.
That devastating prediction was based on TikTok’s real-life experience of being banned for a fortnight by the Indian government in 2019, according to Reuters.
Even if a TikTok US ban was lifted after two months, Pappas estimated, around half of the app’s former daily active users would not be expected to return to the platform.
TikTok has a tussle on its hands when it comes to the major labels, and its determination to show them who’s boss.
But the real fight for the ByteDance-owned platform in the United States may only just be beginning.Music Business Worldwide