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Feb 3 2023

🔵 1, 2, 3, 4, TikTok declares a music war

The latest news from the music and tech industries
Hi there -

If the major labels have always had one thing, it is strength. If you need your music platform to succeed, you need the majors on board.

For that reason, it is rare to see any platform stand up to the majors and dare question the value of their respective catalogues.

Today though, TikTok has decided to pick that fight.

It would appear TikTok has removed major label content from its platform for a subset of users in Australia. The logic is supposedly that it might provide data to show that in fact major label repertoire simply isn't that necessary, such that its absence does not affect usage all that much.

It's a very bold move, no two ways about it. I fear though that perhaps one detail TikTok may have missed is that right now the majors don't actually earn all that much from the platform, and on that basis do not have a huge amount to lose were they to pull their content anyway.

Equally, if TikTok fails to step forward and show the results from this study, it will suggest that in fact the absence of this music made a big difference, thereby handing the majors a good deal of bargaining power.

The timing could be argued to be poor too, given Universal are now aiding increasing sentiment that streaming platforms do not value music enough and that this all requires review.

Arguably a bad time to learn that actually major label catalogue might play a very key role in driving use of your platform...

(And this is assuming TikTok does somehow evade a ban in key territories, something that is feeling increasingly likely.)

Have a great weekend,

D.

🎶 written whilst listening to "Rapid Transit - A Chocolate Industries Compilation", which featured, among others, Prefuse 73, El-P remixing Roots Manuva, Gescom remixing Push Button Objects and more. Listening leaves me wondering what happened to remix culture. I assume it died back with when 12"s were replaced by downloads. Not on streaming services, sadly...
Stories from the Music Industry:
TikTok is trying to prove that it doesnt need major label music and the eyes of the industry are upon it.
TikTok has removed major record company music from its service for a subset of users in Oz. Why? Our sources suggest TikTok is aiming to use the results of the experiment in their next round of record company licensing negotiations. TikToks hope, were told, is that the removal of major label music wont have a profound effect on the engagement of users on the service. This then opens up a conversation about the true monetary value of music licensing from major record labels.

👆🏻Hot take: a very bold move here, though I think the critical error is that TikTok presumes the majors need its income. Given Universal's position on streaming income right now, I'd suggest that's not a wise move. 
Last year, Midia Researchestimatedthat self-releasing artists direct saw their recorded music revenues grow by 25% to $1.5bn in 2021, with the increase in streaming share a key factor in that trend. Heres a caveat: independent labels who do not distribute through Merlin will be included in the 25% of non-major/Merlin streams on Spotify, so its not just DIY artists. Weve changed our headline to reflect this since publication. What else did we learn from Spotifys 20-F filing? The company reached 34bn of lifetime payments to music rightsholders by the end of 2022, up from 26bn at the end of 2021.

👆🏻Hot take: not a massive shock, though it certainly speaks to Universal's dissatisfactions around streaming and who is eating into its market share. 
The news was announced in the House of Commons on Wednesday (February 1) by the intellectual property minister George Freeman, who said he and the DCMS Minister Julia Lopez felt that the proposals were not correct and that would not be proceeding with these. He said: We are looking to stop them and to return to office to have a rather deeper conversation with the APPG who I met yesterday, with experts in both Houses and with the industry.

👆🏻Hot take: common sense has prevailed, thank god. 
Shamrock says that its Content Fund III LP is focused on snapping up a diverse and global portfolio of content and media rights. The company says it will use the funds “to capitalize on the trends, changes, and opportunities across the global media and entertainment landscape.” The company has approximately $4.4 billion of assets under management.

👆🏻Hot take: keen to see what Shamrock does next. It also lends weight to any argument that the acquisitions market is far from slowing down. 
Airbit offers a catalog of over a million beats from producers and beatmakers across the world. The platform, which reports to have over 800,000 users, has so far sold over 2 million beats, according to a press release on Wednesday (February 1). Producers have earned more than $50 million on Airbit to date, the company says. BandLab will keep all of Airbits staff as part of the acquisition, while Airbit CEO Wasim Khamlichi will step down after a transition period.

👆🏻Hot take: a logical move here from BandLab. I do wonder what the market capacity for beat marketplaces though. 
Stories from the Broader World of Tech:
Apple says it now has 935 million paid subscriptions
Apple had a rare quarter where it missed its revenue target due to problems in the supply chain and manufacturing. But its services revenue was a bright spot in the earnings. The company said it now has 935 million paid subscriptions across its services. These offerings, including iCloud, Apple Music, Apple TV+, Apple Arcade, Apple News+, Apple Fitness+, Apple One and Apple Pay, brought in $20.8 billion in the first quarter of the financial year. That is a 6% increase year-on-year as the company registered $19.5 billion during the same time period last year.

👆🏻Hot take: proof if proof was ever needed that Apple's service strategy is paying off and providing growth where all else is perhaps receding a little now. 
The feature enables creators with 50 or more subscribers to invite a guest to livestream with them. Only one guest can be hosted at any given time, however, guests can be rotated during the same livestream and do not share the same 50 subscriber requirement to co-stream any YouTube creator can be invited to collaborate.

👆🏻Hot take: a good feature add. Curious to see what artists take this feature up as there's some argument that YouTube is a much better home for this stuff. Less transient. 
The search giant said during its latest earnings call that YouTube Shorts has crossed 50 billion daily views. The company previously reported 30 billion daily views as part of its Q1 2022 earnings. While the growth performance is impressive, the number of views on Shorts lags on Instagram and Facebook. Last October, Meta said that Reels garnered 140 billion daily views across both social networks.

👆🏻Hot take: growing well then, but still some way behind the competition. I would never rule YouTube out of anything though. 
Other Reads I've Enjoyed Lately:
Why companies make it impossible to call customer service
Need to call Facebook? Frontier? Good luck.

👆🏻Hot take: if you've ever tried to contact Facebook about a problem (or Google, or indeed most tech companies now), this will be extremely relatable. 
Walking is one of the simplest and most strategic things you can do for yourself. It takes little preparation, minimal effort, no special equipment, and it can contract or expand to fit the exact amount of time you have available.

👆🏻Hot take: amen to this. Never underestimate the power of clearing your head a little with a stroll. 
“He possessed the child’s gift of transforming a drop of water into a poem that somehow begat music.”

👆🏻Hot take: a wonderful piece of writing about a genuine musical great. Lovely.

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