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TikTok Has Exploded in Popularity, Music Companies Are Looking to Increase Their Revenue Share.

tiktok vs music companies

TikTok initially paid a one-time flat charge to record companies to license music for inclusion in user-generated videos. TikTok has now grown to become an industry giant in last few years.

  • Tik Tok made $4 billion in sales in 2021 and is projected to make $12 billion in 2022.
  • There are more than 1 billion people who have uploaded videos with audio on Tik Tok.

According to Bloomberg, the three major record labels (Universal, Sony, and Warner) that control over 70% of the market share are demanding that TikTok pay them a larger share of its advertising revenue and royalties.

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To the tune of 75% of US TikTok users,… is a massive music promoter, uncovering and supporting new talent.

The song “Savage” by Megan Thee Stallion has been featured in over 24 million videos, proving that music can also become a viral sensation. But since they charge a flat rate, they don’t bring in any more money.

  • Based on comparable deals with other platforms, one executive claims TikTok should be paying two to ten times more.
  • Between July 2021 and June 2022, for instance, YouTube handed over almost $6 billion to the music industry.

TikTok claims it shouldn’t be subject to the same licensing fees as music streaming services because it isn’t a music platform.

Plus from our point of view TikTok promotes music to the masses. The Record Industry should not be able to call the shots here, as TikTok makes hits!

The parent company of TikTok, ByteDance, has its own music streaming service called Resso, which is currently available in Indonesia, Brazil, and India with future expansion ambitions.

Some Other Hints:

  1. They’ve just trademarked an app called “TikTok Music.”
  2. With SoundOn, musicians can share their work and get paid for it.
  3. A team is being assembled to sign and nurture up-and-coming musicians.

Considering that the labels’ contracts with TikTok are set to expire in a matter of months, it seems likely that the two parties will be able to reach a deal, or at least an extension.

About Davie Bancroft

Davie Bancroft is an accomplished author with a strong focus on investment and the tech business landscape. With extensive knowledge and experience in these fields, he provides valuable insights into emerging trends and opportunities. Davie's writings explore the intersection of technology and finance, offering practical advice for investors and entrepreneurs. His expertise and analytical approach make him a trusted resource for those seeking to navigate the dynamic world of investments and tech startups.