Top music labels are asking TikTok to increase artist payouts, compensating acts with a portion of advertising sales based on song popularity.
Record labels want TikTok to pay up. Universal Group, Sony Music Group and Warner Music Group are now asking the social media platform to share their advertising revenue to increase music royalties, especially as the app is set to make $12 billion this year. Music creators on TikTok have benefitted from using the app as a promotional tool for new releases, but label executives are arguing that the platform should be paying “between two and ten times more than its existing agreement,” per Bloomberg.
Music labels are now trying to figure out how their acts can get an increased payout from TikTok, although the app claims that it’s a “complement to music listening, not a replacement for it.”
“We are committed to creating value for rights holders, songwriters and artists when their music is used, and are proud of the deals we’ve struck and the growing revenue stream we’ve delivered to the industry in a few short years,” Ole Obermann, TikTok’s global head of music, said in a statement to Bloomberg.
In another report from Billboard, the outlet shares figures of $8 being given to an independent label that received 1 million in views. One song that was used in roughly 500,000 TikTok clips, all which generated billions of views, “took home less than $5,000 from the platform.”
Sony, Warner and Universal launched two-year deals with TikTok on November 2020, January 2021 and February 2021, respectively, collecting flat fees instead of a portion of revenue, as the app strategized their advertising venture. Now with the deals reaching a close, record labels are contemplating whether to partner with other music-promoting social media outlets, or devise a commercial negotiation with TikTok.
“Every artist is understandably nervous to bite the hand that feeds you, even if it doesn’t feed you much,” said songwriter and producer Crispin Hunt.