Short-form audio and video clips aren’t the future of the music industry. They are the record business of 2022, something that strikes fear and optimism in equal measure.
When industry professionals gathered last month in Singapore for the 2022 edition of All That Matters, bite-size bits of music was a constant theme.
Get on-board, was the message repeated from the Singapore Hilton stage. Or get out.
In recent years, TikTok has been gathering Gen Z and creatives by the millions. And after a phoney war, the music industry too has clamoured on-board.
It wasn’t long ago when TikTok was in the crosshairs of the National Music Publishers’ Association, and APRA AMCOS. Former U.S. president Donald Trump tried (and failed) to have the Bytedance-operated platform sold off.
Life moves fast in the tech space, and TikTok is now on friendly terms with the industry, helping turn viral stars into fully-fledged mainstream chart stories, and breathing new life into vintage cuts.
It’s no coincidence that TikTok donned the white hat soon after Ole Obermann arrived in 2019, with a remit to forge licensing arrangements with the platform’s content providers.
Obermann, now the global head of music at TikTok and Bytedance, had carved out a long career in major label-land, specifically on the digital and licensing side.
On Sept. 27, Obermann sat for an on-stage chat with TMN’s Lars Brandle, for a wide-angle look at the business and where it’s heading. Here are five takeaways.
Who is using TikTok?
We haven’t released a number in about a year. In September 2021 we released publicly the fact that we’d just got over a billion users. The answer is, everyone is using TikTok.
There are different usage behaviours for different groups. And the younger demographic is more heavily engaged, which has always been the case with music.
When you’re a teenager through to your mid-20s, that’s when you’re most music-heavy days of your life.
TikTok behaviour is similar. But the truth is everybody is on TikTok, there are representations of all groups on it.
The end of the music industry’s “cold war” with TikTok
With any new platform, there are two things that happen. One, the industry doesn’t really understand what is the business model that this company is coming to us with.
And then, how do we make sure our music is licensed and we get paid for producing music.
When I arrived we were still early days, we had a lot of licenses in place but it was not as well organised as it needed to be. A lot of the labels, publishers and societies around the world (weren’t on-board).
People hadn’t been hired yet to deal with it; that requires a lot of people in all different parts of the world. We’ve done that over the last years.
We’re fully licensed and I think the industry understands us better than they did three years ago.
I think we’re friends, we’re still getting to know one another a little bit. Every once in a while we have to work out some issues between ourselves, but for the most part it’s in a pretty good place.
TikTok has a streaming service — Resso
For ease of understanding, it’s similar to Spotify. We have an ad-supported tier and a premium tier, it’s a bit more social than the other streaming platforms; we’re getting really good feedback from users.
It’s only live now in Indonesia, Brazil and India and we’re learning from those countries, and then we’ll think about what we’ll do next.
The idea is that, in the long run, TikTok will be an amazing place to market, promote, discover, even A&R, and then we’ll also have a service where people can actually consume or listen to full length music, in another platform.
Relationships with the streaming platforms
Right now there’s an incredible correlation between success on TikTok and what then becomes successful on Spotify, YouTube, Amazon, Apple, the multitude of streaming services.
You can literally see a 24-48 hour correlation between something that picks up on TikTok first and rises up the charts on those services.
We’re not a direct competitor to YouTube. YouTube is full-length music videos. They’re on-demand, searchable, you can listen to full albums. You can listen to full playlists.
We are a clip service, a short-video service, where music plays a big role. But it’s not about going in and listening to full-length songs. We’re quite different in terms of the core services that we’re offering.
TikTok as a serious revenue source for the music industry
TikTok is only three or four years old, depending on which country you’re in. YouTube and Spotify, they’ve been around for 12, 15 years or whatever.
If you look at where we are now in terms of impact and revenue paid out, relative to where they were when they were three or four years old, I think we’re actually ahead.
But, we’re still figuring out our business models, we’re only live with our premium service in three markets, give us another 5, 10 years and I think we’ll be having a similar conversation.
Produced by Branded, the 17th edition of All That Matters boasted 180 speakers and 38 bands. Music Matters is one of the five streams under the All That Matters umbrella.