The recent news that TikTok is limiting users from using certain commercial tracks in its app in Australia as a ‘test’ was guaranteed to go down like a lead balloon with labels. Now Australian industry body ARIA has voiced its unhappiness.
“It is frustrating to see TikTok deliberately disrupt Australians’ user and creator experience in an attempt to downplay the significance of music on its platform,” said CEO Annabelle Herd in a statement yesterday.
“After exploiting artists’ content and relationships with fans to build the platform, TikTok now seeks to rationalise cutting artists’ compensation by staging a ‘test’ of music’s role in content discovery.”
Herd also cast doubt on whether the test will be a fair one, suggesting that TikTok’s control of its ‘For You’ recommendations feed means that the app “can set its Australian algorithm upfront to – within parameters they define – deliver the results they want”.
ARIA wants TikTok to end the test “immediately”. The latter company said when news of the test emerged that it “will not be in place for long” so the labels body may get its wish – if not as a direct response to its demand. It seems clear that there will be lingering trust issues however.
Talking of trust issues, TikTok’s CEO Shou Zi Chew is currently in the US engaged in talks with politicians in an attempt to reassure their concerns about issues including data security and children’s safety. Judging by the Washington Post’s analysis of how those talks are going – and an interview with the CEO himself – tensions remain.
“We understand we start from a place of trust deficit, and that trust is not won by one move, one silver bullet, one meeting,” said Chew, ahead of his appearance in March before the House Energy and Commerce Committee, which promises to be… sparky.
These are two separate challenges for TikTok, but equally serious ones. On the US politics side, the worst-case scenario is an outright ban on TikTok in the US, a market where research firm Insider Intelligence predicted last year that its ad revenues would grow from $5.96bn in 2022 to $8.75bn in 2023.
However, a proper breakdown in TikTok’s relationships with music rightsholders could be just as existential a problem for its business. Music IS intrinsic to its platform, and without the catalogues of the major labels TikTok would be lesser (plus it would have a new copyright headache if users uploaded that music as ‘original sounds’ for their videos, which they would.)
This all said, the worst-case scenarios still seem unlikely. TikTok will surely sign new rightsholder deals, with the Australian test part of the haggling rather than a move towards cutting ties with the majors. And for all the fiery rhetoric coming out of the US Congress and Senate, there are compromises, changes and deals to be made there to stave off an India-style ban.
Still, addressing both of these issues (plus the keen interest of some of the world’s toothiest regulators in TikTok’s data-protection policies and protection of children) simultaneously is what – for all TikTok’s continued growth and cultural clout – is going to make 2023 the most challenging year yet for the company, and its long-term prospects.
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