Musical company

TikTok is on the road to becoming a next-gen music company

In recent years, TikTok has made it exponentially easier for everyday musicians to become the next big thing. Soon, TikTok may not just be taking over the social media world, but the music industry as well.

by Tatiana Cirisanoh from MIDiA.

By now, TikTok’s impact on popular music is well established. The platform regularly catapults songs to hit status, and it has become a regular fixture in digital marketing campaigns. But behind the scenes, something deeper is happening. Over the past three years, TikTok has built a fully-fledged ecosystem that combines music, streaming and creative tools – paving the way for TikTok to not only influence the music industry, but potentially take it into its own. charged. The launch this week of SoundOn, a marketing and distribution platform for unknown artists, is just the latest step on this path.

TikTok has the three things it needs to build the next-gen music company, which are also the three things others typically lack: the ability to direct artists to fanbases; exclusivity in a world of ubiquity; and a designer proposal.

Cover image of Why TikTok is poised to be the next-gen music company

Artists need fans, not platforms

The first era of what is now called the “creator economy” was defined by giving creators platforms. The new platforms were meant to level the playing field, and while they did that to some extent, they also had the effect of oversaturating it – trading one problem for another. In a similar vein, Spotify was supposed to help artists get discovered, but instead playlists became the new gatekeepers as artists struggled to break through the noise of the 60,000 tracks now uploaded daily. It is no longer difficult to create or distribute music, but it is increasingly difficult to be discovered.

TikTok is arguably the first major social media platform to prioritize discovery, opening directly to a discovery page and using an algorithm that essentially performs real-time multivariate testing for every video. To be fair, users have rightly raised concerns about the constant flow of content needed to maintain a TikTok following. Yet the ability to connect users to their target audiences for free is TikTok’s greatest strength. With the launch of SoundOn, TikTok now claims a role in the entire artist journey, from first release to discovery, breakthrough and beyond.

Exclusivity in a world of ubiquity

The world of music streaming is defined by non-exclusivity. Each platform offers (essentially) the same catalog. What has made platforms like SoundCloud and YouTube so successful is their ability to create de facto exclusive content that one would simply never find on an officially licensed service, such as demos, remixes and video clips. Despite competitors, like Instagram’s Reels and YouTube’s Shorts, TikTok has the advantage of hosting rare music content that streaming services don’t. If Resso can combine music-focused TikTok videos with audio curation and programming, it suddenly has a unique library.

The creator’s proposal

While every other music and social media company scrambles to attract creators, TikTok has creators in its DNA. There’s room for improvement in TikTok’s monetization options for creators, but the platform has steadily evolved to meet creators’ needs, adding a creator-to-brand marketplace, tips, and a creator fund.

On the consumer side, younger generations of music listeners are looking for more control over their musical experiences. While 16-19 year olds under-index for passive activities, like listening to the radio and streaming station, they over-index for active activities, like creating playlists and using TikTok. Half of 16-19 year olds are weekly active TikTok users, more than double the average consumer. While Spotify offers little social and creative engagement, Resso allows users to dothings like creating videos using music and commenting on songs, tapping into new generations’ desire for deeper engagement.

From application to ecosystem

Of note was Spotify’s own failed attempt at a direct download tool for artists in 2018, which the company shut down in 2019 due to label pressure. In the same year, SoundCloud launched its own tool without pushback – perhaps because SoundCloud is a user-generated content platform, rather than just hosting label content. TikTok is still closer to a SoundCloud than a Spotify, which can save it from a fierce pushback. (It will also come down to the classic question of whether the platform needs the music industry more than the music industry needs the platform, or vice versa.)

It’s TikTok’s broader ecosystem, however, that can threaten the power of labels, alongside similar creator ecosystems like what Epic Games is building. Soon, artists will be able to use SoundOn to distribute a song through all DSPs (including Resso), track the song’s performance on TikTok through the SoundOn analytics dashboard, upload a TikTok video with the song’s clip, linking it to Resso, and building linked brand partnerships, all within the same platform. It took the music industry a while to take TikTok seriously as a partner. Combining its focus on discovery with its creator proposition and growing arsenal of music tools, TikTok actually becomes a strong contender.

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