TikTok’s Music Master Plan is coming into focus [Tatiana Cirisano, MIDiA] – hypebot.com

TikTok’s ambitious music master plan, which includes buying up music rights, could be a true disrupter. After all, “Why waste money paying rent when you could just buy the house,” asks MIDiA’s Tatiana Cirisano.
by Tatiana Cirisano of MIDiA Research
Oh how the tables have turned. Just a few months removed from its very public clash with Universal Music Group over music licences, TikTok is reportedly looking to buy up music rights of its own. Not only would this ease TikTok’s reliance on licenses, but it would also presumably allow TikTok to prioritize its owned content in the algorithm and do what music executives have been tearing their hair out trying to do for years: reverse-engineer viral moments. Eventually, the move could help TikTok dramatically reduce its rights costs. After all, why waste money paying rent when you could just buy the house?

This may be the most blatant example of licensee becoming licensor that the modern music industry has seen, but it is not the only one. Platforms can buy rights, as TikTok is now doing, but they can also build (i.e., produce their own music) or partner (with creators). Examples include Tencent Music generating its own music to populate playlists (and other DSPs surely considering it), Riot Games building its own in-house music team with a roster of virtual artists, and SoundCloud and TikTok developing label service-like offerings.
Writer Cory Doctorow’s aptly-titled description of the average platform lifecycle — or as he puts it, “how platforms die” — is highly relevant. His theory goes like this: Platforms first super-serve users in an effort to grow, then abuse users’ interests in order to serve their business customers, and finally, abuse everyone else’s interests in an effort to serve their own. Just like that, the disruptors that promised democratisation simply become the new gatekeepers. More than a decade into both the streaming and social media eras, we are now approaching stage three.
Of course, TikTok’s “Music Content Investment Team” does not immediately turn it into a competitor to the biggest record companies in the world. However, rights acquisition is far from the only tool in TikTok’s arsenal. Parent company ByteDance has been steadily building an ecosystem that gives it a role in every piece of the music value chain, and the picture is coming into focus:
The TikTok Music streaming app, which has yet to launch in the US, seems like the final piece of the puzzle. Yet perhaps ByteDance has reasoned that the music industry’s future growth is not just in consumption, but also in creation and re-creation. Which side of that equation a platform decides to major in is crucial. Today’s music platforms major in the former; tomorrow’s look set to prioritise the latter.
This is not far off from MIDiA’s theory of bifurcation. A new generation of both creators and consumers are spending more of their music-related time on social platforms, splitting the industry into two, parallel consumer worlds: the lean-back world of streaming consumption, and the active, lean-in world of social. This also comes with a bifurcation of music culture (on social) from music monetisation (on streaming). But TikTok’s ecosystem strategy adds another strand to bifurcation theory: not only do social platforms hold the keys to the cultural power surrounding music, but a bigger chunk of the monetisation power as well. 

Email address is not displayed with comments



Save my name, email, and website in this browser for the next time I comment.

Note: Use HTML tags like <b> <i> and <ul> to style your text. URLs automatically linked.

With the internet and digital technologies driving rapid change within the music industry, articles about new releases and who has been hired and fired are no longer enough. Our up to the minute industry news alongside insightful commentary helps our readers sift through the rumors and developments to find the information they need to keep their businesses moving forward.
Hypebot is read daily by more than 30,000 music industry professionals including executives and senior staff of music related tech firms, internet based music sites, every major label group and most indies as well as many managers, artists and members of the live music community:
Contact us for the latesst stats, ad rates and sponosorship opportunites. We also offer combined rates with MusicThinkTank.
“I swear by Hypebot every morning over breakfast.”
Derek Sivers
Founder, CD Baby
“Hypebot is the most focused music business centric resource we have.”
Celia Hirschman
One Little Indian, Downtown Marketing & KCRW-FM
“Well done.”
Seth Godin
Marketing guru

source