TikTok is evolving into a very different kind of music streaming giant.

TikTok is evolving into a very different kind of music streaming giant.

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A billion people are now using TikTok around the world every month – around three times the global audience Spotify pulls in.

And for the music industry, TikTok is expanding far beyond its core function as a repository for frivolous viral videos.

Take, for example, PinkPantheress – the hotly-tipped UK artist now signed to Warner Music / Parlophone, who has over 6 million Likes on the Bytedance platform.

PinkPantheress doesn’t just use TikTok to get her music out to fans; she uses it to actively self-A&R her ideas.

“I post a snippet of [a track], and if people like it I’ll go and record a full version,” she recently told the BBC, adding: “The algorithm is crazy on TikTok, you can post a video and you can have zero followers and it can do well.”

Artists like PinkPantheress, of course, are also using TikTok to get noticed by the big record labels: Some 70 acts were discovered on TikTok and consequently signed by major record companies last year, according to TikTok’s own stats.

The platform’s higher-ups expect that number to grow significantly in 2021.

TikTok’s increasing presence in the music industry has even revived industry trends long thought dead and buried.

Remember when the global record industry blew up the concept of exclusive artist releases on individual streaming platforms? They’re now back, via a side door, on TikTok.

The likes of David Guetta, Coldplay and BTS have all premiered clips of much-anticipated new records on TikTok over the past year – days before these tracks land on music’s largest on-demand streaming services.

And then there’s the potential of live-streamed concerts. This is an obvious expansion play for TikTok – whose per-user watch-time is, according to market research, now rivalling YouTube‘s (and even surpassing it amongst some demographics).

TikTok recently held a live-stream show in Korea featuring major K-Pop stars such as BTS, Twice and Super Junior.

The show took place behind an online gate; users who registered a membership with the event’s headline sponsor (Lotte Duty Free) were given a code for entry. In Korea, a country where live-stream tickets typically sell for $20 to $30, some 600,000 viewers tuned in.

The commercial potential of such projects is vast.

These are just a handful of examples of areas in which TikTok is building on the obvious services it offers the music industry.

And TikTok tells MBW that this menu is about to increase again with the beta launch of SoundOn, a direct-upload service – plus a suite of tools – for independent artists who want to see their music thrive on the platform.

For Ole Obermann, Global Head of Music at TikTok, these and other innovations all point towards the same united purpose: Helping artists build and feed their fanbases online.

As such, TikTok is building a platform that, he argues, fosters deeper connections between audiences and musicians than your standard click-and-play streaming service.

“Tik Tok is a platform that is about music engagement – not consumption. It’s a new form of fandom.”

Ole Obermann, TikTok

“We’re now at the point where a trending song on TikTok will achieve billions of views and many millions of creations in a single month,” Obermann tells MBW.

“That’s an incredible amount of engagement. And that’s really the way that we think about things at TikTok: we are a platform that is about music engagement – not consumption. Whether that’s views, creations, Likes, or shares. It all mixes together in this kind of new form of fandom.”

This fandom factor is attracting music’s biggest names. The past few months have seen everyone from Taylor Swift to Ed Sheeran and ABBA launch their own TikTok channels – while other artists, most notably Jason Derulo, have built their own mini-media empires on TikTok.

Here, Ole Obermann answers MBW’s questions about TikTok’s ambitions in the music space – and explains why he believes the platform’s importance to artists and the music business is set to explode in the years ahead…

Where can TikTok fit into the live-streaming trends in music we’ve seen arise during the pandemic?

We are very excited about the role TikTok might play in live-streaming. There’s a great social layer you can put on top of live-streamed shows, as well as monetization to complement the [in real life] live business.

We believe we can monetize live streaming in many ways. We haven’t really done a whole lot of it yet because we’re currently more focused on building a great user experience. But down the road, it’s something we’ll start testing more and more.

“We believe we can monetize live streaming in many ways… it’s something we’ll start testing more and more.”

Live-streaming on TikTok already has momentum: We saw about 4 million unique [viewers] tune into Justin Bieber’s live-stream performance on his Journals on Valentine’s day. More recently, Ed Sheeran played a [live-streamed show on TikTok] as part of our association with the Euros [soccer tournament].

That had about 5.5 million uniques, and was a great launchpad for his new upcoming album. And a couple of weeks ago, J Balvin played a TikTok live-stream with cutting-edge production that is already up to about 4.5 million uniques, and we’re thinking about airing it one more time.

The show TikTok did in Korea [with Lotte Duty Free] gave us a real peek into how you could potentially sell access or tickets to these events; the whole gated live-stream concept.

I RECENTLY WROTE that the so-called ‘Creator Economy’ is music’s biggest lie; that the vast majority of independent artists are making no money for themselves on streaming platforms, but are collectively making lots of money for the platforms themselves. Where does TikTok fit into that?

A number of years ago a leading streaming platform talked about how large the artist base that can make a living off of music could become. I think the narrative has now totally changed around that, based on what TikTok is, and will continue to evolve into.

We’re now talking about a much broader definition of “a musician”. A musician makes music, and hopefully they can make a great living by getting people to consume their music, by touring and performing that music live, by selling merch etc.

But on TikTok, those musicians can also become creators in a broader sense, and really use the video medium. Then you’re talking to a very large audience, and you can sell them things [via your TikTok channel]. I really think we’re just scratching the surface of where that is all going to go.

“We recently did a few tests in the US where we worked with big-name artists to enable them to sell physical products off of their TikTok accounts. the numbers were massive.”

I’m excited by the e-commerce opportunities on TikTok for artists selling to fans. We recently did a few tests in the US where we worked with big-name artists to enable them to sell physical products off of their TikTok accounts. Those artists included Lizzo and Billie Eilish, and the numbers were massive. It blew us away.

The other side of it is that TikTok creators who aren’t musical creators themselves, are using music. Musicians get paid off of the back of that, and it can become a healthy revenue stream. It helps break songs and artists, consumption goes up on the other platforms, more tickets are sold, a bigger live-streaming event can happen etc.

So you’ve got two sides coming together. And it massively expands the pie.

What can the music industry do differently to help expand that pie with TikTok?

I think a lot about sync [of music] on TikTok in videos made by brands [i.e. advertising TikToks].

We have ambition to grow that business 5x in the next six or seven years… but there are some very ingrained obstacles that have always existed in the industry in terms of how you insert music [into digital ads] and make it available for commercial use.

“we could multiply the size of the entire sync industry in a very short period of time.”

We respect [those obstacles] but we now need to work with the rights holders and the artists to figure it out. Because if we can unlock this, if we can get that music flowing in the way that it should, so that brands that want to use music in the TikToks they are making – which effectively serve as their advertisements – we could multiply the size of the entire [sync] industry in a very short period of time.

Presumably difficulties licensing music for that use has left an opportunity for production music houses, the likes of Epidemic Sound, to fill?

Yes: there’s a massive gap today being filled by these companies that create their own body of work and who provide very flexible licensing.

The perfect solution in the future would be that there is a massive catalog of [‘premium’ / non-library] music that is pre-cleared on both the recorded music and the publishing side. Then you could either do some sort of auction model or bidding model where [brands] can choose what tracks they want to use and see the price points.

“there’s a massive gap today being filled by these companies that create their own body of work and who provide very flexible licensing.”

I understand that there are artist issues too: We wouldn’t want an artist’s music being used by a brand that artist didn’t want to be associated with. Things like that have to be figured out.

But I believe if we could get that kind of [auction / pre-cleared rights] model in place, we would see an exponential increase in the amount of money being spent – and the amount of music being used the way we’d all like to see it used – in commercial TikTok videos.

To tell you the truth, I’m a bit conflicted on TikTok: on the one hand, as you mention, it’s helping artists build and monetize online fanbases, which can only be a good thing. But I also worry TikTok is driving the phenomena of songs mattering more to young audiences than artists.

I wholeheartedly disagree with your second point. I think that is happening as a wider trend, but I don’t think that TikTok is accelerating or encouraging it. I would actually go so far as to say we’re doing the opposite, because we look at the metric of creations more than we look at views.

When we see millions or tens of millions of creations happening around a particular song, to me, that says something really special is going on here. Because people are not just mindlessly hitting play and passively listening to that song, they are creating something; in many cases, creating a 20-second TikTok video might take someone five hours.

That is a more enhanced form of fandom, of paying homage to an artist, than playing a track on a playlist – that’s maybe been algorithmically served to you – on a traditional streaming platform.

There’s a lot of discussion at the minute around the control that major record companies have in the marketplace, particularly in the UK, where a DCMS Committee  recently scolded the ‘big three’ for their market power. The UK’s competition watchdog is investigating Sony Music‘s acquisition of AWAL for similar reasons. Yet when I sit down with major music company people, they all tell me they probably have less direct control over making something a “hit” than ever before… and that’s partly because so much of pop culture today is being driven by the TikTok algorithm. How important is it to you to maintain the purity of that algorithm – to prevent those with commercial interests manipulating it?

It’s extremely important to us; it’s the heart of what makes TikTok so authentic. We will never touch that. Our algo has a very strong master lock on it and no-one knows where the keys are!

What we are doing, and will do more of, is building better tools, programs and campaigns with the music industry that helps them to feature their priority artists – whether that’s emerging artists or catalog artists – on TikTok.

“TikTok’s algorithm has a very strong master lock on it and no-one knows where the keys are!”

Then if those artists create something amazing, it will find its way into the algorithm and get the billions of views that the labels and publishers want to see.

But we have a deep respect for TikTok’s algorithm being untouched by [outside] influence.

What new tools are you building right now – and for who?

The record labels are always asking us for ways to use the huge reach of TikTok to premiere a new record. And with that in mind we’ve recently launched something in the US called HeadStream, which allows artists to premiere a new release, playing snippets of music, interviewing themselves about the creative process. They’re 30 minute live segments and are proving very successful.

We’ve done them with Miley Cyrus, J Balvin, Rivers Cuomo and others. J Balvin’s drew 450,000 unique viewers, which is a pretty big number for a campaign we’re just getting started with.

And what about new tools for independent artists specifically?

Last year we launched a UnitedMasters integration. It was something that we wanted to test because we wanted to make it easier for the unsigned artist community to get their music on TikTok, and out to other DSPs. We saw some really promising results from that.

We now have something that we’re going to be rolling out very soon, in beta initially, that we’re calling SoundOn. It’s a new platform, and a separate entrance to TikTok that is custom-made for undiscovered artists. In short, we’re making it easier for [independent artists] to get their music on TikTok, and we’re going to work with them to much better understand how to reach their audiences on TikTok. We are not charging [artists] to use it – it’s not a profit center for us.

“Through SoundOn we’re going to organise the ecosystem of unsigned artists in a way that doesn’t exist today and has never existed before.”

We’ve heard from many artists that when they upload music to TikTok, they feel like they’re walking into a venue but they can’t find their way to the stage – to define their audience – because the platform’s just so vast. SoundOn is like a well-lit entryway to that stage.

Through SoundOn we’re going to organise the ecosystem of unsigned artists in a way that doesn’t exist today and has never existed before. I think that’s going to make it easier for artists to find their fans. And then for labels and publishers to find those artists.

The [industry’s] entire A&R process, I think, will become more efficient off the back of it.Music Business Worldwide