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Music labels are spending a bit too much time on TikTok

Halsey performs a live concert on ABC television's Good Morning America Summer Concert Series in Central Park in New York

Halsey performs a live concert on ABC television's Good Morning America Summer Concert Series in Central Park in New York

Published Jun 19, 2022

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By Trung Phan

TikTok is known for creating trends. A new one has popped up recently. It isn't a viral dance or challenge, though.

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A number of popular artists, including Halsey and Trevor Daniel, have been complaining that their record labels are withholding releases until the artists' songs go viral on TikTok.

For the Big Three record labels - Universal, Sony, and Warner Music, who, together, account for about two-thirds of music industry revenue - the new emphasis on TikTok probably seems like a good business strategy that protects them from investing in songs or albums that might struggle to gain traction.

But putting pressure on artists to prove themselves on TikTok could easily backfire for the labels, especially with established artists like Halsey.

If more artists realise that they can thrive on their own, they might question what value the major labels are bringing to the table. (The artists' labels didn't respond to requests for comment. Astralwerks-Capitol, which represents Halsey, told Variety that the label's belief in Halsey "as a singular and important artist is total and unwavering.")

Lil Nas X

Plenty of artists have already discovered the power of TikTok. Rapper L'il Nas X used the short-video app to catapult "Old Town Road" to the top of the Billboard chart in 2019. Since then, TikTok has helped many artists score hugely popular hits.

With its more than one billion users, TikTok has become a marketing engine for the music industry. It's a radical shift from the publicity machine of old when labels promoted new music by getting singles into radio station rotations or placing music videos on MTV.

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Their dedicated artist and repertoire, or A&R, teams provided a full suite of services for artists, including distribution, publishing and fan outreach.

But, as music historian Ted Gioia observes, artists can now easily manage many of these functions on their own:

"Musicians can upload songs onto a streaming platform without a label. If they still want to sell physical albums, Bandcamp has made it very easy - no label required.

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They can deal directly with fans, journalists, promoters, booking agents, etc., without a label. They can set up a publishing company with almost no trouble. Getting royalties from (the American Society of Composers, Authors and Publishers) is simply a matter of filling out a few forms."

And while some performers are objecting to having to prove themselves on TikTok, plenty of artists have found that they are able to survive without the backing of a major label.

One indicator of the labels' diminished influence: Major labels have seen their share of music streams on Spotify decline relative to independent and self-released artists every year since 2017, according to a recent analysis by Vox.

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The labels are also losing their negotiating power. The Vox analysis found that among a group of 367 emerging artists, the major labels now are striking deals entitling them to 50% of future royalties, down sharply from the industry's traditional 85% share.

If labels are shrewd, they will leverage TikTok to help rising artists without alienating them in the process. One way labels could help is by identifying trends such as dances or memes that artists can remix.

Another is by reaching out to TikTok influencers who could raise awareness for songs. And labels can work with artists to craft the actual videos, which tend to follow a template.

Yet, music labels might not want to become too reliant on an app that might soon become a competitor. In March, TikTok, owned by Chinese internet giant ByteDance, launched a song distribution platform called SoundOn.

Meanwhile, TikTok has "A&R Manager" job postings in London and Los Angeles to help "identify, sign, and develop new artists across genres."

With access to internal tools and data, TikTok might have an edge on the record labels when it comes to finding the next big act on the platform.

That is one TikTok trend that the Big Three might not want to see.

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