Life at TikTok moves pretty fast. It’s only been five years since Chinese tech giant ByteDance merged its TikTok app with Musical.ly and began to expand internationally.
In that brief time, TikTok reached one billion active monthly users quicker than any other social media platform (helped by the COVID-19 pandemic’s global lockdowns, during which the app took off like a rocket).
Of course, since then, it has also established itself as absolutely essential to the modern music industry, with TikTok virality perhaps the one guaranteed way to break a song in the current environment.
Because things also move pretty rapidly within the TikTok ecosystem, songs can go from initial creation to Trending Sound to global streaming chart ubiquity seemingly overnight.
So, these days, TikTok’s relationship with the music industry is also developing at the speed of light. TikTok’s Global Head of Music Business Development, Ole Obermann, only last sat down with MBW in May, at a time when many people in the business saw the platform as being under pressure from the music industry to get more of its billions of dollars in revenues to music rights-holders.
In the seven short months since, however, TikTok has announced new, mould-breaking deals with Warner Music Group and DistroKid, with a host of other discussions inching towards a conclusion behind the scenes.
It’s also launched its ‘Add To Music App’ feature, which allows users to save songs they discover on TikTok to playlists on other streaming platforms, even though its own TikTok Music streaming service – intended as a rival to Spotify, Apple Music, Amazon et al – is now live in Brazil, Indonesia, Australia, Singapore and Mexico (launching without Universal Music Group content in the latter three territories).
In addition, TikTok has expanded its ticketing partnerships with Ticketmaster and others, and announced its first-ever live music event, TikTok In The Mix (“The first of many, if it goes well,” according to Obermann), taking place in Arizona in December and starring the likes of Cardi B, Niall Horan and Anitta. And it’s launched its Artist Account toolkit, which offers artists and labels a range of features to help spotlight releases.
No surprise then, that Obermann – the executive charged with keeping on top of all this, as well as some equally huge developments planned for next year – is not one to hang about either.
“Tate McRae is going to be the next big global pop star. we’re excited to be part of that.”
Ole Obermann
A veteran of the major label system – he held senior digital roles at both Sony and Warner before switching to the tech giant side of the fence in 2019 – he speaks passionately of TikTok’s mission to spread “joy and creativity” across the planet.
It seems to be working too. 2023’s Top 10 Global TikTok Tracks – once dominated by US pop and rap – will this year feature artists from South Korea, Thailand, Mexico, Puerto Rico, Vietnam, Colombia and France alongside the UK and US.
Similarly, Obermann enthuses about the range of artists currently “bubbling up like crazy” on TikTok, from Tate McRae (“She’s going to be the next big global pop star and we’re excited to be part of that”) and Tyla (“TikTok is going to be the gateway for a lot of African artists to reach the global audience”) to Raye (“She was like, ‘TikTok is where I’m going to make it happen for myself’ – we love that”) and Inigo Quintero (“It’s not what you would think would be a TikTok thumping dance trend song, but the fans are going nuts”).
Last year, TikTok claimed that 14 out of 15 US Hot 100 No.1 songs were “driven by significant viral trends on TikTok”. Obermann expects this year’s strike rate to be “as good or maybe slightly better,” while the IMS Business Report credited TikTok with helping to fuel 34% growth in the global dance music industry during 2022.
That’s good news for Obermann – a man who loves to hunt down obscure EDM remixes online – but don’t expect laurel-resting to become a TikTok trend anytime soon, with a host of new deals, launches and product innovations already in the pipeline for 2024.
As we meet in TikTok’s fancy new London offices, much of the planet is already winding down for the imminent holiday season, but Obermann remains locked into a schedule of back-to-back meetings, even briefly breaking off his chat with Music Business UK to take one particularly vital call.
He returns with a spring in his step and, while he remains tight-lipped about all ongoing negotiations, he does declare confidently that, “Everything is going in the right direction.”
Like everything else on Planet TikTok, you can probably expect it to get there fast…
How is your relationship with the music industry at the moment?
The reality is, it’s pretty harmonious. I’m not going to tell you there isn’t the occasional heated conversation or negotiation happening, as there should be. But everything is going as we would like it to go and, I think, as the rights-holder partners would like it to go. We want to make hit songs and hit artists, that’s what we want to work with the industry on.
How do you do that?
The ‘Add to Music App’ [feature] is worth talking about. We’re going to try and get a few of the other [streaming] platforms in there as well – we want full coverage.
We want every song that happens on TikTok to then get tons of listenership on other streaming platforms. That’s great for all of us. That’s been a big project for the last six months – it was our idea, but it was very much a reaction to the labels saying, ‘You keep telling us how good you are at driving discovery and engagement’ – and this could drive millions and millions and millions of streams on other platforms.
Some people will be surprised to see you working with Spotify, Apple and Amazon, given that TikTok has often been portrayed as a potential threat to those streaming services…
Our pitch was, ‘We’re just trying to complete the musical user experience and you guys are where the big volume of actual consumption happens’. Yes, we have a streaming service, but it’s still only in a handful of smaller countries, it isn’t a full-on direct competitor to Spotify, Apple or Amazon yet. There were a few conversations, some jokes were said and a few points needed to be talked about, but [the audio platforms] were all pretty open [to it] right out of the gate.
Is there a financial element to those deals?
No. We’re doing [‘Add To Music App’] because the labels would like us to do it and because it is the right thing for music and artists. It’s really that straightforward.
There were also some interesting internal conversations – because you’ve got to go to the TikTok product guys. They value every millimetre of that screen real estate and you’ve got to say, ‘Give me a big button right there’. You’ve got to talk to the people who run TikTok Music and say, ‘For now we’re going to point to the outside,’ and they have to get their heads around it.
But it does underline the fact that we’re really serious when we say we want to be the best [music] discovery and promotion service that has ever existed. I think we are already, but we want to get even better and keep innovating because we know there are a few people trying to do similar things.
We keep a close eye on [YouTube] Shorts and [Instagram] Reels: they’re moving fast and trying to do a lot of the same things we’re doing.
Do you see the TikTok-ification of other platforms as a compliment or a threat?
It’s a compliment in the sense that, if people are trying to do what you’re doing, it’s because it’s working. Other services are seeing the way that cultural moments and entertainment happen and TikTok is having a really profound impact there. But it also keeps you on your toes, because it is a threat. You’ve got to figure out how you keep innovating and stay ahead of that.
Would TikTok link to YouTube Music?
Yes, we would. I said in an interview that I was going to call Lyor [Cohen, YouTube Global Head of Music] and ask him about this. I can’t tell you exactly where those conversations have gone, but we are willing and would like to link to all the services.
Will you link out to other platforms even in markets where TikTok Music exists?
Yes. We’ll give a choice. Will it be that way forever? Maybe not. Will TikTok Music be the top choice if you’re not signed up yet? Probably. But if someone is a Spotify subscriber, we don’t need to stand in the way of that, at least at this point.
Maybe over time that changes but right now, this is the priority. If we became very focused on subscription, then maybe you’d have to reshuffle a little bit. But we’re not there, or really close to there yet.
Do you still want TikTok Music to become a ubiquitous service?
Yeah. There’s a real commitment. Right now, the commitment is, let’s take advantage of what’s already happening organically on TikTok. But the longer-term goal is, let’s build a music ecosystem where discovery, promotion, engagement, consumption, live, merch, tickets, livestreaming, all those things can happen.
That’s not going to happen right away. Even rolling out subscription to the entire world, that’s a multi-year initiative – we’re not going to be live in every country next year, and that’s OK.
How do you plan to leverage TikTok to grow TikTok Music?
We have to think about what the user behaviour is going to be 10 years from now. For a 16, 18, 20-year-old who’s spending lots of time on TikTok right now, it’s not only that they’re discovering a song on TikTok and then clicking through to Spotify to listen, they’re also listening to a full-length song and then they’re like, ‘I want to go make a TikTok because this song’s amazing’.
If we can do that full loop, where you can be listening in TikTok Music and there’s one button to make a TikTok with your favourite section of that song, that’s where it gets really interesting for us.
Would you do a deal with Spotify to have such a button on their service?
I don’t think it’s out of the question, but let’s see how successful our [TikTok to DSP] integration is to begin with and then we’ll see. It was mentioned, but everyone said, let’s walk before we run.
What can TikTok do to help artists make more money?
Our commercial music library is a key initiative for that. There are millions of small and medium businesses on TikTok and they all want to use music to promote themselves. But they can’t use premium music from the labels and publishers, because they’ve got to get a separate license.
The sync market is the most outdated model in the world. The model existed when you had one-off huge TV commercials that someone wanted to license a song for: you’d get a big cheque, but that deal might take months to do. Now there are 10 million little businesses that want to use your music in 10 minutes, so how do you meet that demand? It’s a huge business opportunity; it could add 10% to the total size of the music market in a few years if we get this right.
“Are we going to do a billion dollars in concert ticket sales in a few years? Probably not. But can we be a nice, complementary place for artists to sell their tickets? I think we can.”
I’m also really bullish on TikTok Shop and merchandise. What QVC was for television, TikTok is for next-generation selling of goods. Obviously a lot of [merch] sales still happen at concert venues, but we can make it bigger as an e-commerce category than in the past, because it’s so contextual on TikTok.
Same with tickets. The context of, ‘You’re loving this song and hey, here’s a button because that artist is coming to your market soon’ – that works for the impulse buy. Are we going to do a billion dollars in concert ticket sales in a few years? Probably not. But can we be a nice, complementary place for artists to sell their tickets? I think we can.
How much of an advantage is your label background when it comes to negotiating with rights-holders?
It’s a big advantage. Because I think a lot like them and I’m sitting on the opposite side, trying to do the deals and figure it out. It enables me to see both sides and be like, ‘Look, there’s a way to do this where everybody wins’. It’s good to have people who have done both sides because then you have that perspective. [Robert] Kyncl came in from YouTube [to Warner] and he really understood it, he was very engaged.
Did TikTok’s new Warner Music Group deal have a different structure to your previous deals with them?
We’re just finding more ways for them to monetise their music with TikTok and ByteDance, and some of those are different models to they used to be. That’s all the detail I can give you.
Are you confident the new deals will generate more money for the music industry?
Absolutely. It’s already growing a lot.
But what ends up happening is, YouTube or Spotify [say], ‘Here’s what we’re paying out to the industry’ – and it’s multi-billions. Then people look at TikTok and they’re like, ‘Why isn’t their number that big?’, because we’re so top of mind. But we’re not there yet; we’re still growing our business.
“If you look at the growth of what we’re paying, it’s a hockey stick.”
We don’t do as much revenue as YouTube does, not even close, and we’re a completely different model to Spotify, but that’s what we end up getting compared to.
If you look at the growth of what we’re paying, it’s a hockey stick. But it’s still smaller than those guys. We’ll become really big over time, but it could take a few years.
What’s your response to those people in the industry who say that TikTok is great for breaking songs, but less successful at breaking artists?
Well, let’s watch Tate McRae as a case study, because I’m confident we’re going to be a big part of making her a superstar.
We do need to play more of a role in that. We’re getting more focused on how we help the artist take more control of their destiny on TikTok and hopefully, that translates to everywhere else.
But I have also thought this for a while: people point the finger at us and say TikTok’s not good at breaking artists. Our role shouldn’t be to break the artist. The label, the manager and the artist should break the artist.
We should give them tools to do that and an audience of 1bn people. We’ll do as much as we can. But we’re not going to be able to do all of it.
Are you aware of how TikTok is changing the way music is made?
The way music reaches fans has always significantly impacted the format. In radio, people tested the hell out of the right length for a song to capture the attention on radio – three minutes, somewhere in that range. The CD determined how long an album was and how many songs it had. It’s always worked that way.
Some artists or writers get really clever about where they put the hook and if there’s a perfect choreography that can happen to that, so there’ll be a better chance of a big dance trend. And they should be doing that, though hopefully not at the cost of losing the musical integrity.
Is there any danger that a generation grows up thinking 15 seconds of a song is enough?
I don’t think so. There’s a lot of stuff competing for your attention, so getting a teenager to sit down and listen to a 60-minute album is probably harder than it used to be. But we want music to continue to be an art form the way that it has been. We don’t want it to just be little 15-second snippets.
If you could change one thing about today’s music industry, right here and now, what would it be and why?
I would want songwriters to think of themselves as marketable artists, rather than someone who’s behind the scenes. Songwriters should be seen as creative forces in the same way that a musical performer is.
Could we use TikTok to present a new song and get lots of artists interested in doing their version of it? You might end up getting 10 different versions that are all hit songs, but they’re different genres or in different languages.
Finally, where do you want TikTok to be in five years’ time?
Hopefully, TikTok will still be breaking songs, artists, genres, trends globally. TikTok Music will be a big global subscription service. Merch and live and commercial music library will be significant revenue contributors to the industry. We’re not going away anytime soon.
MBUK is available as part of a DIGITAL + PHYSICAL MBW+ subscription – details through here.
All physical subscribers will receive a complimentary digital edition with each issue.Music Business Worldwide
