Pressure mounts on TikTok over its music royalties payments


There has been a steady increase in the chorus of grumbling from music rightsholders about how TikTok pays royalties for music used on its platform – and how much it pays. Now those complaints are being accompanied by the receipts.

Billboard’s latest feature on TikTok offers some figures that are calculated to startle. One track that was used in around 500k TikTok videos which collectively generated billions of views “took home less than $5,000 from the platform” for example.

Another independent label shared figures with Billboard showing royalties of $8 from 1m views on TikTok: “actually a better rate than the one exhibited on three other indie labels’ most recent statements that were shared with Billboard,” as the publication noted.

TikTok is firmly on the defensive here, and while its global head of music Ole Obermann talked about TikTok’s role in “enhancing musical engagement” in a way that “translates directly to more financial and creative opportunities for music creators”, his follow-on comment that “our community comes to TikTok to watch videos, not to listen to full-length tracks” is unlikely to stem the complaints.

It is true that TikTok virality generates streaming spikes on other platforms where royalties are higher. But it’s also true that there are ghosts of past industry arguments about promo versus consumption (from MTV to YouTube) that are stiffening rightsholders’ resolve to push TikTok to pay more.

Ongoing rumours about parent company ByteDance’s desire to expand its music streaming business beyond the three markets currently served by its Resso app provide the spice in this mix. The licensing talks for any such expansion will inevitably include some pointed discussion about how TikTok’s royalties model evolves.

It’s a headache for TikTok, but former WMG exec Obermann and his team, including several veterans of hardball licensing talks from the label side of things, will be hopeful of sealing deals and dampening the industry grumbles. Perhaps we’ll hear more about how when he keynotes the NY:LON Connect conference in January.

TikTok’s rapid growth has made it a magnet for such migraines, including outside music. This week alone, it has been accused of suppressing voter-turnout videos in the US; questioned about why banned misogynist influencer Andrew Tate’s videos are still popular on its app; faced a call in the UK for a coroner to investigate whether a TikTok challenge played a role in a 12 year-old boy’s death; and been the focus of a Twitter thread that’s picking up steam where a prominent researcher on anti-semitism outlined how his 16 year-old son had been served a range of Nazi and anti-semitic posts in his ‘For You’ feed.

To reiterate: all of that is this week alone… and it’s only Tuesday. TikTok is fighting a lot of fires at the moment, and while music royalties is the most important from our industry’s perspective, issues like children’s safety, misinformation and data privacy are higher on the priorities list for regulators and politicians – and thus, inevitably, for TikTok and ByteDance.

None of which is to suggest the music industry should not fight for higher royalties from TikTok, or that its music team will not be working hard to conclude the deals necessary for that, and a deeper move into music streaming.

The storms emerging from other parts of TikTok’s service will inevitably hog attention at the highest levels of the company and its parent firm – as they should – but music remains core to TikTok, and avoiding sliding into the kind of years-long ‘value gap’ rows that have dogged YouTube would be the best outcome for TikTok and rightsholders alike.

Written by: Stuart Dredge