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GUIDE IN BRIEF

TikTok’s effect on the music industry

Abstract illustration of TikTok's influence on the music business
Saiman Chow for Quartz

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💡The big idea

TikTok has altered the contours of the music industry, from artists’ path to stardom to the power of record company executives.

🤔Here’s why

1️⃣  Just three years after its arrival in the US, TikTok is now considered by many to be a major player in music.

2️⃣  It’s helped artists get better record deals,

3️⃣  and changed what record companies look for in new artists.

4️⃣  The app’s mysterious algorithm holds the key to its success,

5️⃣   though some question whether the artists who rise through TikTok, or the app itself, have the staying power to alter the industry forever.

✍ The details

1️⃣ Just three years after its arrival in the US, TikTok is now considered by many to be a major player in music.

TikTok launched in 2017 and became available worldwide in 2018, after the Chinese company Bytedance purchased the moderately popular lip-syncing app Musical.ly and folded it into TikTok. TikTok was quickly embraced by teenagers in the US because of its irreverent tone and easy interface for uploading and sharing.

But steadily, the platform became an incubator for hit songs. Lil Nas X’s country-rap song “Old Town Road” stormed TikTok in December 2018, sparking a playful dance trend called the Yeehaw Challenge. As TikTok stars cracked the mainstream, the app’s reach grew swiftly. TikTok hit 1 billion downloads in February 2019 and was the most downloaded app of 2020. In 2019, Bloomberg valued Bytedance at $75 billion.

2️⃣ It’s helped artists get better record deals.

In May 2020, Los Angeles resident Tai Verdes hadn’t had much luck breaking into the music industry. By Aug. 2020, that had changed: He was fielding multiple record deals from major labels; his song “Stuck in the Middle” had nearly 4.5 million streams and had reached the No. 1 spot of the Spotify Viral 50 chart; thousands of fan videos were using his song on TikTok

He used all of this to negotiate a contract with Arista Records that gives him a level of creative control many established musical stars would envy—and he gives the credit to TikTok.

“TikTok gives you leverage as an artist, which is something artists back in the day didn’t have,” said Verdes. “You didn’t just have a 50-million-stream song out of nowhere. So now you don’t have to do those old deals where you have to sign away four albums and they give you a $2 million [advance] that you have to pay back anyway. I knew I wanted to own my intellectual property and to have a short-term deal, because that gives me more power.”

3️⃣ It’s changed what record companies look for in new artists.

A billion impressions implies that an artist has wide appeal, and labels, as yet unable to manufacture their own viral moments, have long looked to ride indie groundswell to billboard success and touring revenue.

“If you [managers and labels] need to put points on the board quickly, you can look at virality,” said Binta Brown, a music manager and executive. But it comes with the risk that artists can’t monetize that attention, or don’t have the raw talent to build on a single hit. “You can chase virality and find yourself in a bidding war, and wind up spending more than you necessarily should be,” she added.

4️⃣ The app’s mysterious algorithm holds the key to its success.

While TikTok is full of flashy trends and famous names, its real kingmaker is its code. The platform’s algorithm prioritizes pushing new clips into users’ feeds—and, unlike other social media platforms like Facebook and Instagram, that content does not need to come from people the person is already following.

How the TikTok algorithm selects the videos and users it pushes is a zealously guarded secret. The company has said only that it comes down to a combination of factors including user interactions (i.e. previously shared videos and followed creators), video information (i.e. the song used, and hashtags), and account settings (i.e. device location and language preferences).

5️⃣ Some question whether the artists who rise through TikTok, or the app itself, have the staying power to alter the industry forever.

One reason TikTok’s rise is notable is that it is happening during an especially precarious time for the music industry. Record labels, both major and indie, are still figuring out how to turn profits online and how to structure their arrangements with TikTok, in particular.

For TikTok to truly change the music industry, it must provide more than just exposure: It has to give artists opportunities to monetize their work. How they do so is an individual choice for each artist, but so far, a few options are available: continue to amass streaming income, sign to a record label, or partner with brands to make sponsored content.

📚 Read the field guide