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TikTok’s Distribution Play Could Cause Tension With the Music Biz

"You need any advantage you can get," says one artist manager. "It's the most competitive environment in the world."

Chloe Adams had racked up 1 million followers on TikTok through her bedroom-pop covers of Lil Nas X, Shania Twain and Justin Bieber, as well as her own music, when someone from the platform contacted her late last year with a question: Would she want to be among the first artists to use its new in-app marketing and distribution tool, SoundOn, to release her next original song, “Dirty Thoughts”?

Adams was already using one of the few dozen digital distributors that, for a small fee, will ensure that an artist’s music is uploaded and available across all streaming services and digital sellers — joining the deluge of the 60,000 songs uploaded to Spotify daily. But TikTok’s proposition was appealing: SoundOn, still in beta at the time, could not only offer that same distribution, but it would also give her a dedicated relationship within TikTok to help promote her songs on the app, as well as share best practices of what works and what doesn’t within its algorithm. And she would get paid streaming royalties directly through the platform, rather than waiting for an outside distributor to collect them or relying on the ancillary brand sponsorship that would come in as a result of her exploits on TikTok, as most creators do.

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“TikTok is literally one of the only places nowadays to get your music heard as an independent artist, so it seemed like a no-brainer to me,” Adams says. And the partnership paid off. After “Dirty Thoughts” began to pick up on its own, due to Adams’ cheeky lyrical play — “I had this idea to write songs that would catch people’s attention in three seconds,” she says — the TikTok team chipped in with marketing like a banner on its homepage and putting the track in front of other creators to use in their videos. The song has racked up 10 million Spotify streams since its November release; Adams’ TikTok following has jumped to 1.4 million, and she signed with TaP Management, which also reps Lana Del Rey and Ellie Goulding, though she has thus far declined label offers.

“In this day and age, breaking an artist is harder and takes longer than it ever has before, but one of the ­quickest ways to help break an artist is via TikTok,” says Tony Beard, Adams’ manager at TaP. “Your relationship with SoundOn gives you that extra edge over any other artist. It’s a money-can’t-buy relationship. Your competitors who are signed to a major label might have all the creator marketing funds to throw it into the world, but I just find that extra relationship with TikTok is key in launching a new artist.”

On March 9, TikTok brought SoundOn out of beta. The platform has captured the pop culture zeitgeist — and, in doing so, has become an essential tool for both rising creators and the music business, with labels and managers using it to discover talent, promote and market songs, and stay on top of trends.

“I think TikTok has established itself as the most important artist and music discovery and development platform in the world, and probably even historically — there’s never been anything that’s quite at this scale, that’s quite as able to deliver and connect the right song with the right audience,” says TikTok global head of music Ole Obermann, a Warner Music Group veteran who joined the service at the end of 2019. “There are already lots of artists getting discovered on TikTok and then finding success on Spotify and Apple, getting signed to record-label deals. So we’re just trying to figure out how we make this better for the musical creator so that we, ideally, have every aspiring musician in the world thinking, ‘I want to start my musical career on TikTok.'”

That creates some tension with the music industry, with SoundOn raising a familiar question in the digital age: Can artists make it outside the label system?

TikTok is not the first platform to experiment in the ­music business. In 2018, Spotify announced a direct upload option for artists who wanted to skirt the label system, while partnering with DistroKid to allow distribution to other digital service providers — an initiative that sputtered out after nine months. More recently, SoundCloud repositioned itself as both a streaming service and an artist-services company. But TikTok is different. More social media platform than streaming service, it grew from music-inspired roots — emerging from the predecessor app Musical.ly in 2017 — but has been late to embrace the music business, finalizing its current deals with the labels by February 2021 and not stoking the same kinds of fears that Spotify did, when many thought the streaming platform was directly threatening the labels’ business model.

“There was always this conversation about, at any moment, the major labels would be in trouble if Apple or Spotify created record labels,” says Milk & Honey founder/president Lucas Keller. “But being Capitol Records is a pain in the ass. You have to do customer service, talk to artists, make records, deal with egos — it’s a lot of work. For a tech company, there’s no [artificial intelligence] to deal with a difficult artist. The tech companies don’t want that headache.”

In that respect, TikTok’s forays into the music space align more with YouTube’s, a relationship that stalled into a type of cold war between the Google-owned video platform and music labels over the perceived “value gap” between the revenue YouTube was generating from music and the payments that the labels received. One industry source decried TikTok’s payments as lower than most other partners in the business, adding that TikTok has used its ever-growing importance to the music industry to push for lower rates and noting that the terms of service for SoundOn amount to an artist signing his or her life away. (Keller agrees that the terms — which include granting rights that are “irrevocable” with a worldwide license to “copy, modify, correct [and] edit” — constitute a “vague list of bad words”; Obermann stresses that they include “a pretty flexible exit clause” should artists want to sign a label deal after using SoundOn.)

Another industry source, however, downplayed some of the issues TikTok’s entry into the music business presents, saying that exposure SoundOn could bring might be helpful for label A&R and that a general turn towards embracing the music business wouldn’t necessarily be a bad thing for the labels. Indeed, this source points out that while it took years for YouTube to repair its label relationships, ultimately the platform rolled out a paid subscription service in 2018 and beefed up its label- and artist-services divisions. Some see the relationship with TikTok evolving in a similar way, with labels eventually being able to utilize some of the tools held in reserve for SoundOn acts while also finding ways to extract additional value from TikTok.

Ultimately, TikTok’s position on the cutting edge of music discovery is enticing for rising artists.

“To have the expertise of the people who work there to help support you and make sure you understand the ­platform — shit, it’s game-changing,” says Rashad Tyler, co-founder of Supergiant Records and co-manager of Muni Long, who used SoundOn to help promote her breakout hit, “Hrs and Hrs.” “Because you need any advantage you can get — it’s the most competitive environment in the world.”

A version of this story originally appeared in the March 26, 2022 issue of Billboard.