Can TikTok survive the Universal Music fallout?
As Universal Music pulls 30% of the world's music from TikTok over royalty and copyright concerns, Campaign explores how instrumental the use of music is to the success of the platform and for those who advertise on it.
Friday 1st March was the day the music died... at least it was on TikTok. Last Friday marked the end of TikTok’s current license for the Universal Music Publishing Group catalogue—spanning some 4 million songs—as it officially expired.
Almost overnight, popular songs by megastars including Taylor Swift, Olivia Rodrigo, Billie Eilish, and more fell silent on TikTok. And it all came about because of a major fallout between the world's biggest record label, Universal Music, and the most influential social media app, TikTok, over music royalties.
In an open letter published in January, Universal Music (UMG) accused TikTok of "bullying" them since it only wants to pay a "fraction" in royalties to its artists compared to what other platforms pay. Despite having more than one billion users, UMG claims that barely 1% of their overall revenue comes from the platform, which is controlled by the Chinese corporation ByteDance.
Meanwhile, TikTok argues that the platform serves as a free promotional and discovery vehicle for music talent, and that it's been able to reach ‘artist-first’ agreements with every other label and publisher. "Clearly, Universal’s self-serving actions are not in the best interests of artists, songwriters and fans," a spokesperson said.
As a result, TikTok's current licence for the 4 million song catalogue owned by Universal Music Publishing Group has now formally expired. This has meant that 30% of popular songs have been removed from the platform. But not only is TikTok removing songs by megastars signed to Universal, but any recording of a song currently available on TikTok that has been co-written by a songwriter signed to Universal Music Publishing. Some industry estimates say up to 80% of all music on TikTok could be muted.
Can TikTok survive without the world's popular music?
Let's not forget that music has been the bedrock of TikTok. The wildly popular app started life as Musical.ly—a platform on which users created and shared short lip-sync videos—until it was merged into a new app and TikTok was created. But music has remained a core element of the platform both for users and brands who advertise on TikTok; all successful ad campaigns proliferating in the app require heavy music consideration.
Marie Lee, senior strategist at Virtue APAC, says that while music has always been a big part of TikTok’s DNA, the success of the platform owes more to the behaviour around creation and creativity, instead of the music that lives on it.
"Users on the platform have always created content with music, not around it," says Lee. "With the departure of UMG’s music from the platform—or if other record labels begin pulling their music from the platform in the near future—users will continue to use other available music as an ingredient that aids the creation process, and similarly for brands, more would turn to custom sound partners, or subscription sounds to create content for the platform."
Meanwhile, Ryan Dickinson, creative director at MassiveMusic in Singapore, says that even with UMG pulling 30% of the world's music over concerns like artist compensation and copyright protection, users will still find a way to use the tracks they like one way or another. "It’s an impossibly big platform to monitor every single corner of," says Dickinson. "Just look at the sped up or slowed down phenomenon in tracks. I’m unsure if song recognition software is at a stage where it could pick an original song played at different speeds. If it could then I’m sure people would figure out another way of changing/remixing a track so they could still use it."
Perhaps it's simply the case that TikTok has grown far too fast and big to be stopped now. The platform currently has 1 billion monthly active users worldwide, and has been downloaded over 3 billion times since its launch in 2016. There are a staggering 34 million videos posted each day on TikTok.
"Never fear you will still be spammed with the latest dance trend or cat collage," says Taz Papoulias, head of media & investment at Murmur-Group. "Yes, effectiveness and engagement will be altered in select categories based on content type but that's about it. "The virality of users who make up dance moves to Taylor Swift songs will decline, but the virality of content such as an amazing dish being cooked at home or watching someone build their back timber deck will not be affected because you chose to use no music. Once again those engaged are doing so due to the topic and content—not the music."
Will the absence of tracks from well-known artists change the dynamics of music-driven campaigns on TikTok?
TikTok is heavily reliant on music. It's a 'sound on' platform, and viral content frequently originates from an audio clip that is subsequently remixed in an infinite number of ways, akin to an audio meme. Similar to this, music plays a crucial role in ad campaigns on the site as they can’t be the only silent content on there and expect the same reach.
Martin Reiher, partner at amp sound branding in Asia, says that while the absence of tracks from well-known artists could alter music-driven campaigns on the short-form video platform, this should not be seen as a bad thing.
"I see it more as a wake-up call for brands, one that will force them to reflect on their approach to sound and take these recent label disputes as an opportunity to invest in their own sonic equity through owned brand sound," says Reiher.
An example of a strategic response to these challenges can be seen in the transition of Mercedes-Benz towards its own sonic DNA. By focusing on owned sound, Mercedes-Benz not only navigated around licensing complexities but also engaged its community in a unique way.
"The initiative led to users remixing and sharing the brand's sonic DNA, showcasing how owned sound can extend brand presence into cultural conversations and enhance audience engagement," says Reiher.
Florent Adam, managing director at sonic branding agency Sixième Son, says that the Universal / TikTok battle is actually a perfect moment for brands to question their musical strategy.
"It is known and proven that the use of popular songs or well-known music in brand campaigns doesn’t help their performance and objectives," says Adam. "In reality, when a brand uses a well-known song in a campaign, only the music resonates, leaving people with the music or the artist in mind, but without the brand. With custom and exclusive musical work, brands achieve much better results on awareness, recall, and identity."
However, others argue that due to the availability of songs by well-known artists on TikTok, marketers have been able to increase their influence by working with artists who have large fan bases. This enables the company to become more widely recognised while also establishing its presence in popular culture. Since the TikTok algorithm rewards content that rides on trending songs, it also becomes an effective tool in boosting brand love and recall.
"Without music from these artists, brands will have a smaller pool of talent to consider when picking someone to create for their brand, and whose persona is in line with their brand," says Lee. "Where brands were once able to monitor trending music to establish what would resonate with audiences, in order to craft their own music-driven campaigns or utilise some of these trending music tracks in their social content, we will see more brands look to commissioning new music and sounds for brand campaigns."
This could also serve as an opportunity for brands to make way for up and coming artists on these platforms that are too often overlooked despite their cult social followings.
"I hope that as an industry we take this as an opportunity to amplify the voices that might otherwise have lacked visibility across 'big brand' soundtracks," says Kate O’Loughlin, associate strategy director, Rufus. "Rather than defaulting to the popular artists, marketers should look to shift their focus (and their funds) towards musicians and producers who may not fit the conventional 'brand music' mould."
Will TikTok minus popular music result in a drop in users?
While music from Universal artists has been removed or muted on the short-video sharing platform gradually over the past month, beginning February 1st, TikTok claims that, as yet, it hasn’t seen a decline in its user base since UMG’s recordings catalogue was removed from its platform.
However, during a test it run last year in Australia, TikTok limited user access to certain popular music from major labels and lost customers. After the test was launched, fewer individuals were using the app in the market, according to data from Data.ai via Bloomberg; however, sources within TikTok contest these numbers.
It's not clear whether the fallout between Universal Music and TikTok will result in a drop in users on the platform, trigger a shift to other platforms like Instagram, or whether other major record labels like Sony and Warner Music will also join Universal Music in removing their catalogues from the platform.
But in the event that more music is removed from TikTok, could it survive?
"I can't imagine a platform as large as TikTok disappearing due to music issues," says Karsten Kjems, CEO of Sonic Minds. "However, if there was no music available at all, I think the platform will probably lose users and then advertisers. But there will always be a focus on user-generated content. As always, the world will keep turning, and users and businesses will find other effective ways and platforms to market products and services."
However, others feel that if TikTok does not find agreements with the different music industry players and performing rights organisations, then it will struggle to survive.
"Music is an essential element for TikTok, without music it can't survive, says Adam. "But not finding an agreement suits no one's interest—neither TikTok's, nor the music industry’s, nor the brands’ or content creators’. A fair deal must be found."
Ultimately, Dickinson sees the battle between the two heavyweights as a short term situation.
"TikTok and the labels are obviously in the middle of a big royalty negotiation and both parties thinks the other one needs them more than they do," says Dickinson. "The reality is that they both need each other, and so they will eventually find a middle ground where they can continue working together. I believe other labels will join if TikTok doesn’t come to the party on royalties, but at some point they will bend and it will all be available on the platform again.”
Perhaps it's too early to predict how this will pan out. On the one hand, given Universal has used TikTok to not only grow their artists but even discover and sign some of its most popular musicians, it's unlikely the decision will be permanent.
"The ability of the platform to turn artists and songs into overnight sensations is too embedded into music culture that Universal may run the risk of their talent falling behind without it and eventually maybe even leaving the label," says O’Loughlin. "However, I do believe TikTok wouldn’t be the same without music. So much of the content, from dancing to VLOGs, hinges on music to work and so if we see other labels follow in UMGs footsteps then it's likely TikTok will adapt to be able to overcome."
Overall, TikTok still remains arguably the most important platform for young people and an important digital awareness channel at the top of the marketing funnel to many brands. "As marketers, ultimately we go where the consumer goes," says Papoulias, "so I guess you will still see me marketing on TikTok this year!"