The Impact of Tiktok on The Music Industry

As the world moves rapidly towards a technology-based society, it’s no surprise that the way we produce, and access music has changed significantly. A recent contributor to this evolution has been the billion-user app: TikTok, which has peaked in today’s meme-endorsing society. TikTok is a music-incorporating social media platform whereby users upload and interact with other users to a 15-second video of lip-syncing, dance challenges, pranks or act-out memes to music. The tunes are usually associated with the content of the video and vary in genre such as pop, rap, R&B, country, and electro. Sound effects can also be sourced from other famous videos, films or an original creation by the users, and these combine to accumulate to the ‘hype’ of a trend, or creates the next ‘new thing’. The re-birth of the former-equivalent app Musical.ly was marked in November 2017 when Beijing-based company ByteDance acquired the app for $1 billion and merged it into TikTok and Douyin (Chinese-version) in August 2018. This Chinese-owned video-sharing app has virulently spread across the globe leading to a global phenomenon, titling the parent company ByteDance as ‘world’s most valuable start up’ of $75 billion. This global TikTok explosion has impacted the music industry in three major ways; the way in which consumers access and are exposed to music, creating a new entry pathway into the music industry and economical impact on the rights-holders.

The New Method of Music Exposure

In this constantly-evolving modern era with ongoing development of technology, there has been a major transition where music has gone mobile. Digitalisation of music to mp3 format has led to the reduction of production of CDs, just as vinyl records became outdated by the invention of CDs. This not only resulted in the decrease in manufacturing costs and hence the decline in the production industry, but also has meant that music can now easily be incorporated into digital world, giving rise to many various streaming platforms such as Spotify and SoundCloud. More recently, TikTok has effectively combined music streaming with social media and has been successful in setting unique trends world-wide. This creative combination is in keeping with the society’s existing necessity to connect and interact online as well as the desire for fame, but also exposes a variety of new songs via user-created virulent-videos. Hence despite being a video-oriented platform, TikTok is powerful in shaping the music industry.

The limitless shelf of recorded music in digital world grants users access to a wide-variety of songs, and similarly the artists a wide-ranging audience. TikTok supplies a library of licensed-music in which users can overlay their video with or use an original-creation of their own. This gives the consumers a varied-selection of music-exposure which they would not have had in the past. Songs that go viral on TikTok are ‘refreshingly unpredictable’ that aren’t ‘streambait pop’ (Cooper, 2019), allowing for the discovery for new songs. This was evident in the success of Lil Nas X’s ‘Old Town Road’; a country-rap, and iLoveFriday’s ‘Mia Khalifa; an Atlanta hip-hop, which deviate from the standard pop genre. These successes can be accredited to the hashtag-challenges on the app; #YeeHawChallenge for ‘Old Town road’ has a total of 185.2 million views and ‘Mia Khalifa’ #HitOrMiss reproduced over four-million TikTok videos. Songs by famous artist also form a large proportion of the videos on TikTok, however Cooper explains ‘that’s not what defines the platform’ and it is instead the ‘freaky, relatively unfamiliar voices like Smokehijabi’s (iLoveFriday-member) that cut through’. TikTok has conversely provided artists with a potential audience of one-78billion users around the globe (Sensor Tower, 2019) with 510 million monthly-users(Dareportal, 2019). Australia and New Zealand alone account for 1.4 million monthly active-users, driving 1.6 billion video views every month(We Are Social, 2019). TikTok’s explosive growth of 500% year-over-year since 2017 portrays the ongoing expansion of this app whereby users spend on average 52 minutes per day binging on videos. TikTok’s daily contribution on individuals generates countless hours of involuntary exposure to music, where already-famous artist’s songs are exposed to a wider audience and new songs are being recognised as the ‘TikTok song’. Taylor Lorenz described TikTok as a ‘really effective distribution network’ with ‘a lot of song discovery mechanisms so you can research music really easily and find stuff that resonates’.

New pathways into the music industry

Online platforms have allowed many alternative pathways which bypass the agency’s selection, and TikTok has opened a new gateway into the music industry. With no restrictions of users in the app (excluding minimum age of 13), TikTok is easily accessible for all and this reduced barrier to entry provides each user equal opportunity to potentially attain fame, resulting in economic abundance. According to Frank Woodworth, founder of Glacial Concepts (marketing consultancy for artist), the platform provides two useful tools in music marketing; an algorithm which allows TikTok creator to reach a large audience without necessarily having many followers through suggested-contents, and the ability for the trending-songs to be reproduced and associate with millions of viral videos- an ‘exponential’ or ‘multi-viral promotion’ (Woodworth, 2019). This allows small musicians to accumulate views without the overwhelming need to frequently post, as required in other social media platforms such as Facebook or Instagram. This ease of recording, reproducing, marketing and distributing recordings on the platforms reduces the need for a recording agency, hence increasing the chance of a successful entrepreneurship to bypass the traditional selection process by agencies. The impact of TikTok’s ability to provide access was demonstrated by Lil Nas X, the 19-year-old American rapper, singer-songwriter who produced the global hit ‘Old Town Road’ himself using a beat he purchased for $30 on an online platform BeatStars- a digital marketplace of original beats. When first released in December 2018, the song was a lost-track in SoundCloud. The transition from a negative bank account to a multi-millionaire roots to a hashtag he created on TikTok which went viral - the #yeehawchallenge- where people switch into cowboy outfits and dance, with over 6 million users in US recreating the TikTok videos to his song. The #foryou page on the app played a major part, which encouraged users to participate in the hashtag-challenges. This resulted in the song ‘Old Town Road’ topping the Billboards Hot 100 Charts, which maintained its position for 17-weeks, titling the longest-running No.1 single in Billboard’s history. Lil Nas X credits his success to the app, saying ‘TikTok helped me change my life’, explaining it brought ‘several different audiences at once’ (TikTok, 2019). His TikTok success has led to a collaboration with Billy Ray Cyrus on a remix and signing with Columbia Records. With over 500 million monthly users, TikTok has become a hotspot for creating, sharing, marketing and distributing music- the four functions of the recorded music industry- which removed barriers or restrictions to entry, enabled by the technological shifts today.

Economic impact on interest groups

Despite its effectiveness in promoting, the ease at which TikTok videos can be downloaded and reproduced can raise copyright issues for the rights-holders. Rights-holders include songwriters, artists, publishers and record labels, intertwined by the granting of rights in contract law. Copyright Law entitles the owner of the work exclusive rights to reproduce the work, to communicate it to the public, and to give permission for others to reproduce or publicly perform the song. Hence, owners of the work have the right to negotiate terms in which they grant permission, usually in the form of a royalty. Mechanical royalties are paid to the owner of the copyright in the music and lyrics (songwriter/publisher) every time a ‘device’ is sold- including digital files that may be downloaded in modern era. Performance royalties apply when a song is performed or communicated to the public, in situations such as radio stations or background music in public locations. In any video played in TikTok, both copyrights should be considered: the right to mechanical production (recordings owned by recording-label) and the right to public performance (song-compositions owned by songwriter/publisher), where violation results $150,000 statutory damages in America (Pitchfork, 2019). Hence, TikTok should be acquiring a synchronization which grants them permission to embed each song with the visuals for 15 seconds. Although this right should be granted by the terms of the owners of the copyright (songwriter/publisher), it is usually licensed in the technology-companies’ own terms. This is due to the Digital Millennium Copyright Act (DMCA) which ensures companies are removed from liability for copyright violation of their users, given they instruct to their users not to and aren’t ‘aware’ of the individuals violating. This places the onus on to the artists to report a fabled DMCA takedown notice of each individual violation, which may be millions in a case such as ‘Mia Khalifa’ or ‘Old Town Road’. Jeff Price, the CEO of Audium (company specialising in licensing, and royalties on digital platforms) recalls Musical.ly (former-TikTok)’s lawyers being non-negotiable, saying ‘it’s either you can sign this contract and get paid something, or don’t sign the contract and your music’s still going to be here but your not going to get paid anything. You’re going to have to deal with DMCA takedowns. Goodbye’. In the terms and conditions, TikTok directly states ‘by submitting User Content via the Services, you hereby grant us… the right to reproduce sound recordings (and make mechanical reproductions …, and publicly perform and communicate to the public sound recordings … all on a royalty-free basis… to any third party, including, but not limited to, a sound recording copyright owner (e.g., record-label), a musical work copyright owner (e.g., publisher), a performing rights organization’ (TikTok, 2019). This protects TikTok from the copyright claims such US National Music Publishers’ Association scrutinising that TikTok ‘consistently violated U.S. copyright law and the rights of songwriters and music publishers’ where a large proportion of the platform do not have a licence in place. Although TikTok contributes significantly in popularising a song, the rights-holders of the song may not receive royalty and hence inhibits generation of the full potential revenue, especially for already-famous artists.

On the contrary, the marketing aspect of TikTok may outweigh the royalty that should have been generate, through other platforms. There is a strong correlation between the popularity in TikTok to the charts of the song, as seen by the success of Nas X, who even suggests he should pay TikTok. He further elaborates that ‘they really boosted the song... When TikTok hit it, almost every day since that, the streams have been up. I credit them a lot.” (Time, 2019). Similarly, according to Genius data, ‘Mia Khalifa’ pageviews jumped from 1400 in late-September to 25,000 by the end of October, where the hashtag had over 80 million views on TikTok, pushing the song up the Spotify U.S. Top-50 Charts. Despite the popularity, iLoveFriday has reportedly worked out a deal with TikTok that lets the service use their song for free, in exchange for a promotion for their upcoming projects. Xeno Carr, one of the members of iLoveFriday explained ‘the relationship between TikTok is more important than asking them to pay me for a record. It’s giving us exposure and that’s what we need to push the brand forward’ (Pitchfork, 2019). For new-rising original-artists such as Lil Nas X and iLoveFriday, this Integrated Marketing Communications Plan outweighs the royalty they did not receive from TikTok. The ability to easily reproduce TikTok videos onto other streaming platforms such as compilation videos on YouTube and TikTok-songs playlists on Spotify generate royalties for rights-owners by increasing plays. In the case of ‘Mia Khalifa’, the song was released through TuneCore- digital distributor that places music on YouTube, Spotify, Apple music- pays artist royalties from streams, but doesn’t license songs to TikTok. Views of the official music video increased by a factor of 10, and parts of the song has been played over 200 million times on YouTube, with royalty of around $150,000. ByteDance’s president explains the app’s AI system processes 50 million GB of data every day, analysing user’s video clips and generates and algorithm for content recommendation. This targets a niche audience, hence exposure on TikTok serves as an effective tool for marketing despite the violation of rights. Additionally, TikTok has formed a new paid-partnership within the music business- #TikTokpartner- a new economy for consumers. TikTok influencer partnerships are forming between third-parties whereby music agencies may consider contacting famous TikTok-users to promote their songs through use of hashtag-challenges, as was done by Lil Nas X.

Conclusion

As Allen Berdged said, ‘digital is a continuously evolving landscape’ (Watt, 2019), hence it is only natural that music must flow with the changing trends of society. Many platforms that incorporate music will be impermanent, with the boom of TikTok in the last two-years illustrating the fast-paced yet powerful impact it can have. The 15-second videos attracting almost an hour daily usage demonstrates the effectiveness of TikTok in attracting an audience in a sustainable way that enhances the experience of both the creators and consumers, through the indirect advertisement of songs incorporated to the memes that users relate. This free yet innovative app that allows users to interact and connect with the in-groups is what sets TikTok apart, establishing a monopoly in the music and social industry where the users directly shape the music industry. TikTok has raised issues in terms of copyright law however others such as Bergede believes copyright is not ‘catching up at all’. Perhaps it’s the Copyright Law that is becoming outdated and unenforceable that needs modification. In the digital era, ‘music is like water. Music is everywhere’ (Bertis Downes) and ‘anywhere that people are listening to music is actually the end-game now’ (Charles Caldas), hence it is up to the rights-holders and interest groups to effectively make use of these changes.