MASHENE Music Update: April 25, 2023 Image Copyright 2023 by MASHENE Music llc
Move over A&R execs and playlist editors, there’s a new boss in town, and it’s not even human! TikTok’s algorithm has become the music industry’s ultimate decision-maker, with its feedback loop filtering out the hits from the fillers with just a swipe. With over 150 million monthly active users in the US alone, surpassing Spotify’s 90 million, TikTok’s power in shaping music trends is undeniable.
From reviving old classics like Fleetwood Mac’s “Dreams” to launching new acts like Bella Poarch with a staggering 100 million followers, TikTok’s viral impact is exciting for fans but exposes a major pain point in the industry – slow payment systems. While TikTok virality can skyrocket streams on other platforms, the lag in payment processing leaves artists in a credit-crunch, watching their success explode on TikTok but waiting indefinitely for the paycheck to arrive.
Let’s break it down. Say a song goes viral on Spotify on Dec 4th, my birthday. Spotify reports the usage to labels in mid-Jan and pays the label in Feburary. Typically, labels pay artists 90 days after the end of Q2, which falls on June 30th. That’s a whopping six months from viral success to actual payment. And spare a thought for us songwriters, who may have to wait until early next year for our share of the pie.
This time lag has real consequences for artists and songwriters alike. Anthony Brown, the CEO of Breakr, a cutting-edge marketplace that bridges the gap between artists and influencers, sheds light on the revolution happening in the music industry., shared at SxSW 2023 how one of his managed artists, charlieonafriday, went from being relatively unknown to gaining millions of followers within 18 months thanks to TikTok, but the payment delays prevented him from capitalizing on the sudden success and building momentum.
The rapid rise of TikTok-fueled viral hits means artists are left waiting for payment long after they’ve achieved cultural significance. This is the new reality of the music industry. To address this issue, artists need real-time options to capitalize on their sudden momentum, rather than waiting half a year for payment to arrive.
But fear not, there’s hope on the horizon. Several artists are proactively seizing control of their own destiny. Grammy-nominated producer and DJ Jennifer Lee, also known as TOKiMONSTA, has experienced the payment delay gap firsthand. In the past, she relinquished the copyrights to her label in exchange for an upfront advance. to avoid waiting for a paycheck that may never come. She has taken a new direction by co-founding Young Art, her own label, which utilizes blockchain technology from Sona, a platform she co-founded with a team of web3 technologists, to provide artists with real-time payments.
Audius, another player in the web3 music space, is also offering real-time payments through blockchain-powered streaming services. Utilizing the transparency and speed of blockchain technology, Audius is able to pay rights holders in just fifteen seconds – that’s even faster than a TikTok reel! This level of transparency and efficiency is unprecedented in the music industry.
Other companies are also exploring real-time payment models on traditional music platforms. With HIFI’s Cash Flow, artists can receive royalties in real-time based on beat-by-beat earnings data, granting them the ability to access their earnings as they happen without needing to alter their existing business partnerships or relinquish their rights.
Major labels are also stepping up their game. Sony Music launched the “Artist Forward” initiative in 2020, including features like Cash Out Now and Real Time Advances for artists who choose the conventional major label route. Artists have already withdrawn over $50 million using these features, showcasing the industry’s efforts to address payment delays.
Whether it’s a breakout artist like charlieonafriday or an established producer like TOKiMONSTA, the music industry is recognizing the need for real-time resources to capitalize on TikTok-fueled virality. Companies like Sona and Audius are leveraging blockchain technology to offer transparent and speedy payments to artists, with transactions happening in seconds rather than months. HIFI’s Cash Flow is another example of a real-time payment model that allows creators to access their earnings immediately without sacrificing rights or partnerships.
Even major labels are stepping up with initiatives like Sony Music’s “Artist Forward” program, which includes features like Cash Out Now and Real Time Advances, allowing artists to withdraw funds quickly. So, while the TikTok algorithm may be the new boss in the music industry, artists now have more options to navigate the payment lag and build on their sudden success in real time.
As the music industry continues to evolve, it’s clear that real-time payments are becoming a priority to keep up with the fast-paced nature of viral hits on platforms like TikTok. The days of waiting months or even years to get paid for cultural significance are slowly fading away as innovative solutions emerge. Whether it’s blockchain-powered services, real-time royalties, or major label initiatives, opportunities are knocking, or TikToks are trending, and artists now have the means to answer them.
Stay tuned for more updates on how the music industry is adapting to the changing landscape and empowering artists to thrive in the digital age. And that’s the MASHENE Music update on how TikTok is changing the game in the music industry!
