We Must Call Time Out on TikTok
universalmusic.com
universalmusic.com
* Universal want TikTok to pay similar fees for use of music as other online platforms such as YouTube ($0.004 per stream) or Spotify ($0.0039 per stream for US listeners)
* TikTok views its platform as a means for artists to promote their music, and therefore doesn't think it should be paying anywhere near as much
Interestingly:
- there was a similar argument for the value of radio plays (pre-internet). Radio stations viewed themselves as a way to promote the artists' work, and argued that they therefore shouldn't pay any royalties.
- this has since been settled resolved in favour of the music makers; from what I can see, in the UK, BBC Radio 1 pays around £40/minute in royalties
- the amount of royalties an artist receives from the record company varies significantly, but is usually in the order of 10-20% (Taylor Swift will have a better deal than a small indie band); plus any publishing revenue. Some artists also have different percentages for different types of revenue (e.g. streaming vs CD sales)
- this article has a good overview of how royalties get split for streaming in the US: https://www.billboard.com/pro/music-streaming-royalty-paymen...
My view:
* TikTok should pay royalties for the music it uses (music is an integral part of the package that makes them so hugely profitable)
* UMG should pay artists a higher proportion of streaming (and other) revenues
* streaming companies should be paying more per stream (may imply a price increase for streaming services)
That's not a comparable figure, there can be millions of people listening.
What I found interesting was the precedent; the argument that radio was a means to promote artists, and therefore shouldn't pay royalties, was discounted even in those (to artists) much more favourable circumstances.
This assumes BBC Radio 1 has only one listener, which is probably underestimating the popularity of radio, even today.
- TikTok revenues were estimated at $9.4 billion in 2022, at a $75bn valuation. Add revenue is projected to rise to $22bn in 2024. ByteDance (parent company) profit estimated at $6bn in 2023. They seem to have enough money to pay for the content which enables this growth (this may not just apply to the music element).
- The fact that they don't generate as much revenue per stream as YouTube is of no use to the artists whose works they are using to generate that revenue. Their work is still being used; and they should be paid for that usage. If TikTok's business model doesn't support payments to the artists, then that is TikTok's problem to solve - not the artists'.
I think a good argument is the point above that as only a fragment of a song is typically used, the amount should perhaps not be as much as a full song stream e.g. on Spotify or YT Music. Though that does open the question as to whether a stream of a Pink Floyd song should be paid as much as a stream of a Ramones song - given the difference in length!
plus appartently there is not proper consideration for
>the difference in length!
Oh, well.
There's lots of unresolved fundamentals when revenue is not coming in per view or per length, but people are trying to use things like this as a KPI.
Misguideds gonna misguide.
For the vast majority of artists and music lovers, the ideal model so far is not a "business" model, more along the lines of the free sharing proven by the likes of Napster. Artists didn't make any money off of Napster, but most of them don't make any money from rights organizations either, or when they do it's closer to zero than it is significant.
The only way to surpress the free file sharing was to offer a paid service that was insignificant in cost to so many mainstream consumers that it was marginally viable, and go from there. Consumers paying for it in some way was the main consideration, not paying the artists very much. So this is all we got now and ever since.
Until the price rises enough to no longer be insignificant, and naturally triggers Napster-like procedures to trend back toward becoming undisrupted.
There's just not enough money for any significant middlemen between an artist and the lovers of their music.
With more than one rights brandisher "competing" by failing to lower consumer prices as the streaming services splinter, and trying to prolong a business model where the artist gets less than the majority of revenue generated, all that's got to lead to alternatives where once again the savvy consumers get everything free and the rightsholders and their artists get nothing directly.
I don't think TT should pay such rates.
1) People don't go on TT specifically to listen that music
2) The music is generally a companion to the video which is centered on some silly dance or something
3) You hear fractions of the record 99.9% of the time.
I guess TT could and should negotiate to pay on the % of the time the song is listened. E.g. if a recording lasts 300 seconds, 10 views lasting 30 seconds should pay the entire royalty as in Spotify/Youtube.
This doesn’t work because publishers end up creating versions that are scaled to increase profits.
You hear 10-20 second snippet of the song, pitched up and sped up.
However, it screams that they've come away from the negotiating table with their tail between their legs and are trying to save face by blaming the other party as the bad guy.
Will artists stick with UMG if they have a big enough "independent" distribution through TikTok, YouTube etc. That's got to be Universal's biggest concern.
Note however that very few successful musicians started on those small distributors. That suggests the marketing done by the bigger distributors is still very important for a musicians success.
It doesn't take a genius to recognize when a musician is much better than average, and sure marketing will help a bunch but you can't market something that sucks, it will fail regardless.
So, the way it works is the reverse of what you think: good musicians get to be in majors because they are much better than average, and they will get a lot of advantage from the infrastructure/logistique/network from the big players early on, even if it means they will need to take a cut in the future. That and the fact that if you are a musician starting out, you are very likely to be poor or in an uninteresting odd job, a major who can just buy you out with enough cash to cover expenses for years is exactly what you are looking for....
And in the end, I don't think the marketing matters much. A good track is a good track, which is why some get to be reused endlessly. The reason they do marketing is because they can afford it, from all the cash the artist is making for them ever directly or indirectly.
All this to say that these are the reasons most people strongly dislike the major rightsholder companies; while they have their usefulness in some way, it feels quite bad seeing them make so much profit while plenty of artists barely get by. And the artists they "defend" are mostly the extremely successful ones that are so wealthy those license conversations seem very greedy and out there. Sure, TikTok makes money but it is not strongly related to music and the artists who would get payouts are the ones already making big bucks.
Universal likely trying to get ahead of TikTok becoming a full music platform.
1. Isn't it the height of hypocrisy for an entity like Universal to be questioning anyone else on the subject of “the issue of artist and songwriter compensation”
2. You know you are really treating the creators badly when Universal are calling you out on it.
I doubt Universal's real concern has as much to do with artist incomes as this statement suggests, and I would be interested to see some of artists' takes on the matter.
I think it would be awesome to see tiktok for a few days blocking all universal music content and see how crowds react. I suspect crowds will soon adapt to AI and indie music.
Yes, the record companies want to keep their monopoly on that
I'm going to say it's highly unlikely that the chatter among your social media friends is accurate for the same reason you stated - they weren't in the room any more than you were. The people who were in the room for sure aren't chatting about it.
"It is sad and disappointing that Universal Music Group has put their own greed above the interests of their artists and songwriters.
Despite Universal's false narrative and rhetoric, the fact is they have chosen to walk away from the powerful support of a platform with well over a billion users that serves as a free promotional and discovery vehicle for their talent.
TikTok has 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."
This is a little hyperbolic, mate. I don’t think the Rolling Stones or Taylor Swift are sweating TikTok.
Banning TikTok is akin to "banning all apps from a country" and the obvious response will be that country will ban your apps in return... and businesses operating in those countries may be quite unhappy to find their market evaporate.
I agree in general, although in this particular most Western apps are banned in TikTok country of origin anyway.
Can you tell which "western apps" are banned in Cayman Islands?
It's a Chinese company. The location of incorporation is pretty tangential to the discussion of app censorship.
Other than the GFoC (Great Firewall of China) scenario, how would they be banned? Maybe dropping all route broadcasts that contain TikTok's range[s]?
Even if were possible to ban them, you have the more likely scenario that they drop an endpoint on the dark web to get around that (see: Facebook[0]) and you're back at square one.
They just hate it that they can't use excessive censorship like they do on western made social media platforms. Only leverage western countries has at the moment is using/abusing ads revenue and IP laws.
My nephews just grab any device and start scrolling
I wouldn't be able to put a TV ad on SkySports with a song in the background of it without paying for usage.
A large music distributor complaining about another large music distributor doing it better.
My sympathies lie with the artists, not the corporates.
https://www.hrw.org/news/2023/12/20/meta-systemic-censorship...
https://www.aljazeera.com/news/2023/11/10/tiktok-faces-renew...
https://www.forbes.com/sites/brianbushard/2023/10/10/billion...
supporting anti-western anti-civilisation pseudo progressive propaganda might be, though.