WILl 2023 see a social media platform become music’s major record label no.4?

What were once clear lines between streaming and social platforms are now blurred

By Jonnie Owen

Wednesday, 29th of March 2023

TikTok has music at its core. Its ‘sound on’ mantra has helped break new artists, led songs to receive their highest-ever streaming numbers after appearing in videos and catapulted music from the past right back to the top of the charts. 

It therefore came as no surprise when TikTok launched SoundOn: an all-in-one platform for music marketing and distribution, designed to empower new and undiscovered artists, helping them develop and build their careers.

If they get SoundOn right, we might see TikTok pivot further towards establishing itself as a more central player providing more holistic music services such as recording advances; development deals; merchandise (live shopping); live events, sync, brand partnerships and 360 contracts. And as a result, they could create their own artist roster for whom they can provide the above services. A one-stop shop for artists both old and new. 

Two recent major developments have taken place that signal a major change at TikTok.

@snoopdogg Tha Dogg checcin in. Excited to tell y’all Death Row Records music is back for you to enjoy. Go get the songs on TikTok’s curated Death Row playlist available now 👊🏾🔥💨 #blackmusic #superbowl @musicontiktok @soundon ♬ Gin & Juice - Snoop Doggy Dogg

Firstly, TikTok recently conducted tests in Australia by restricting some users’ access to the plethora of popular hits usually provided by the major labels via UGC licences. This could indicate they are exploring going at it without major label music catalogues. The catalyst for this is the ongoing complications reported between music rights holders (labels, publishers, songwriters and artists) and TikTok over licensing terms. According to research firm Data.ai, the results for this test have been mixed, with some results that ‘suggest the company is still dependent on its access to popular songs’. It is difficult to account for this wave alone, especially with the current scrutiny the Chinese-owned app is under from global governments which may sway usage.

Secondly, TikTok has attracted established artists such as Snoop Dogg who recently became the first large artist to distribute music via SoundOn, namely the Snoop Dogg-owned Death Row catalogue which features hits by hip hop megastars 2Pac, Nate Dogg, Kurupt and Snoop Dogg himself. This ultimately shows that Snoop Dog recognises TikTok is paramount in today’s music ecosystem in successfully reintroducing music from the past to a new and hungry young audience and creates longevity. Snoop Dog even launched this collaboration during the Super Bowl. A proper PR touchdown.  

Over at Spotify – the platform that claims responsibility for clamping down on music piracy and leading the music consumption race – they announced at their annual Stream On event that they’re introducing short form video content on the home feed, as well as an AI-powered DJ tool which will service streamers.

The purpose of the AI DJ and the 30 second video clips will be to encourage artist discovery by tapping into a feature similar to that of the TikTok ‘For You’ page, where users are algorithmically served content they may like based on their scrolling habits. You can’t help but think, however, that this comes with both negatives and positives for the artists. 

Starting with the positives: there are some opportunities for artists to be innovative in getting closer to their fans with this feature by offering the story of the song, behind-the-scenes footage, fan tokens (NFT), outtakes, special guests (i.e. a collaborator or producer) and thus casting the net out wider in aiding fandom. Perhaps in the future, this feature will also allow artists to leverage the power of influencers and offer takeovers or collaborations and tap into a new audience. Opening the feature up to brand sponsored posts could also provide a lucrative additional revenue stream. 

The negatives however may result in low uptake as it is yet another task upon the already digitally burned out artists who have a long list of social content output in their exhaustive schedule. Thinking long term, the big issue is: will this feature follow the suit of all social platforms and look like a golden cloud to begin with until they flip the engagement and force artists to pay to reach earned and new audiences? Thus, adding another cost on top of a mountain of existing ad costs. This also isn’t the first attempt by Spotify to introduce short form video with failed attempts like Spotify Stories in 2020.

Spotify also beta tested a direct-to-artist distribution service in 2018 only to be shut down a year later. You’d think now was a good time to revisit this type of service that sits more within their lane. 

It does feel that artists, especially independent artists who operate without teams, will now more than ever need to be strategic and selective with what platforms will best benefit them or they could risk burnout. Understanding their audience by conducting litmus tests with their content output and monitoring with the data analytical tools provided by all platforms will be key to getting the balance right. 

I think TikTok might just pip Spotify for being the champions of the platform era, as TikTok parent company Bytedance has in its arsenal a secret weapon: Resso. 

Resso is a streaming service that is yet to be launched in the UK, Europe and USA which has recently filed for patent in the UK under TikTok Music. The BPi reported that 81% of music consumption in 2022 resulted from streaming and so it makes sense for TikTok to want to get in on the action. TikTok Music has a unique opportunity to use learnings from the current Spotify model and offer more favourable royalty kickbacks to artists from streams, and by doing so, providing them with some leverage to heal some of the wounds from feuds with music rights owners. This puts them in a very strategic position.

What were once clear lines between digital streaming platforms and social platforms are now blurred.

SoundOn and Resso, under the umbrella of TikTok Music, could form a music powerhouse: a progressive one stop shop label that earns ad revenue from monetised content that helps drive extra royalty kick back through to its sister streaming service and compete for the majority market share.

Millions of users waking up to a new streaming tab on the TikTok app will rattle the cage for Spotify and others. If a mass exodus of major artists follow Snoop Dog and gain good yards, we may be looking at the beginnings of major label no.4: TikTok Music. I’ve got my popcorn at the ready…