The Game Has Changed: TikTok and the Music Industry
- Phoebe Davidson
- 2 days ago
- 6 min read
Cover Image Featuring Photos (From Top Left) by David Lee, Priyanka Pruthi, Peter Chiapperino, Crisco 1492, Ueli Frey, Toglenn, Raph_PH, Max, Vogue Taiwan, Ben, Valerie Albert. The NEW 96.5, TheOfficialPandora.
In the digital age, the music industry has been indelibly shaped by the ever-expanding and rapidly changing social media landscape. Over just a few decades, how we create and consume music has shifted dramatically. 20 years ago, if you wanted to hear the latest release from an artist, you had to go out and buy a physical copy of a CD or Vinyl; iPods had just exploded onto the scene; YouTube was still relatively new; and digital ownership was far less accessible than it is today.
Now, we have access to nearly all of the world's music tucked in our pockets and purses, available to us at all times through streaming services and an ecosystem of personal devices. In many ways, this accessibility has democratized music, allowing for it to reach farther and wider than ever before, and bringing sounds from every corner of the world to reach new audiences.
Yet, despite the liberation brought on by this shift, record labels still yield considerable power; it is just dispersed and mediated by the forces of streaming giants and increasingly addictive algorithms. Earlier this year, Kiss singer and bassist Gene Simmons spoke on AXS TV about his bleak prognosis for the modern music world; in his eyes, the industry as we know it is dead. The streaming era’s pay model makes it nearly impossible for working-class musicians to earn a sustainable living from their art. Initially, TikTok seemed to be a gleaming exception to this, offering an alternative path for independent artists to break through without relying on labels or covering the costs of production themselves. However, virality on the app or elsewhere doesn’t necessarily translate to commercial success.
Royalties in the Streaming Age
Simmons argued that we’re unlikely to see the emergence of any new era-defining artists like the Beatles or Bob Dylan. Without labels covering the costs of recording and promotion, many musicians struggle to sustain long-term careers once they release their work. Despite notable protests and protective legislation efforts, streaming giants like Spotify and Apple Music continue to pay artists fractions of a cent for every stream. Today, a song would need to be streamed over 250,000 times for an artist to earn just $1,000.
A 2022 report from the International Federation of the Phonographic Industry (IFPI) found that only the top .4% of musicians on streaming platforms earn more than $10,000 annually. Streaming royalties alone are hardly enough for artists to break even, much less make a living. Meanwhile, that wealth continues to move up. Spotify reported a total revenue of $4.3 billion in 2024, yet artists see only a tiny fraction of these profits. In March of 2024, House Democrats introduced the Living Wage for Musicians Act, legislation that would grant artists a minimum of one cent per stream and establish a direct fund for artists to surpass label cuts.
Today, a song would need to be streamed over 250,000 times for an artist to earn just $1,000.
In 2021, Universal Music Group (UMG) launched into a “Global Alliance” with TikTok, granting the platform licensing rights to its entire catalog. Shortly after, Sony Music Entertainment and Warner Music Group followed suit. These "Big Three" labels collectively control two-thirds of all music on streaming platforms, making their agreement with TikTok a significant acknowledgment of the app’s essential role in music promotion. However, TikTok’s legal battles in the U.S. have raised questions about the future of these licensing agreements.
Musicians in the U.S. are protected, to a certain extent, under the Music Modernization Act (MMA). Passed in 2018, this legislation streamlined the royalty process and improved protections for artists, ensuring more equitable pay for their work. However, the law doesn’t currently apply to video-sharing platforms like TikTok. In response to TikTok’s refusal to meet some of the standards outlined in the MMA, Universal Music Group pulled its catalogue from the app last year before renegotiating a new deal that aimed to secure better compensation for artists.
A key point of contention in these negotiations was whether TikTok should pay artists the same royalties as traditional streaming platforms. The tech giant argued for lower rates, claiming that songs are only used in short clips rather than full-length plays. This remains in place under its current model, and royalties on the app are paid based on how often a sound is used rather than how many times a video featuring that sound is viewed or shared. It is clear that the fight for fair artist compensation is far from over, and the financial model for musicians will continue to evolve alongside technology.
The TikTok Effect
Regardless of what comes next, record companies cannot ignore the magnitude of TikTok’s impact on the industry. UMG’s decision to renegotiate its licensing underscores the app’s power. Once their music was pulled from the platform, songs in UMG’s catalogue continued to be used and shared, albeit of lower or distorted quality and without any compensation for the label or its artists at all. The app is a clear driver of musical discovery, genre innovation, and commercial success, and this can be used to any label’s advantage.
The app is a clear driver of musical discovery, genre innovation, and commercial success, and this can be used to any label’s advantage.
TikTok’s Music Impact Report for 2024 found that 84% of songs on the Billboard Global 200 last year first gained traction on the app. The report also found that US music listeners on TikTok are 68% more likely to use a subscription streaming service than the general population.
The numbers don’t lie, and we’ve watched this impact unfold as the app launched the careers of many of today’s biggest stars: Lil Nas X first hit the charts after “Old Town Road” went viral on TikTok in 2019; Doja Cat’s “Say So,” Olivia Rodrigo’s “Driver’s License,” and Jack Harlow’s “What’s Poppin?” all gained a spot on the charts after going viral on TikTok trends; Ice Spice broke out on the app in 2021, launching her career that next year; PinkPantheress gained notoriety by posting short clips of her original music while in school, building her career from the ground up on TikTok; Keara Wilson’s viral choreography to “Savage” helped turn Megan Thee Stallion into one of hip-hop’s biggest stars; Benson Boone amassed almost 2 million followers before releasing his first single. The list could go on, particularly with hundreds of indie artists who have had career-defining moments on the video-sharing app. Likewise, there is a clear TikTok-influencer-to-pop-star pipeline that has transformed the likes of Addison Rae and Charlie D'Amelio from teenagers dancing in their bedrooms to recording artists.
In addition to pulling new artists and music onto the scene, the app has also been instrumental in reviving old hits, bringing them to new generations in the process. TikTok’s music team has been vocal about the potential for legacy labels to capitalize on this opportunity for re-virality. Throughout the pandemic and beyond, the app reignited interest in songs like Fleetwood Mac’s “Dreams,” Jack Johnson’s “Upside Down,” and Simple Plan’s “I’m Just a Kid.” After being used in various trends, the dated tracks saw massive spikes in streaming numbers decades after their original releases and success. For artists with already established fan bases, TikTok can be a unique marketing tool, allowing for a new form of direct marketing and musical promotion.
Virality vs. Authenticity
TikTok’s success in the music industry is largely owed to its hyper-personalized algorithm, which determines content visibility based on user interactions, engagement, and ad preferences. The ability to “hack” this algorithm is akin to a superpower for artists, as it can provide an unprecedented opportunity for exposure. However, many in the industry worry that this leads to artists sacrificing authenticity for virality. Some critics argue that TikTok has fostered a distinct style of music: short, catchy hooks and sound-bites designed for quick consumption or use in a trend rather than for artistic depth.
Others caution that success on TikTok, and thus in the industry today, demands loyalty to trends over talent, with artists gaining recognition for dance challenges or memes rather than musical innovations. This phenomenon is not unique to music but extends to all creative industries, highlighting the broader issue of rapid consumption and omnipresent commercialization in the social media age.
Others caution that success on TikTok, and thus in the industry today, demands loyalty to trends over talent, with artists gaining recognition for dance challenges or memes rather than musical innovations.
At the same time, TikTok can be a powerful tool for community and discovery. According to the 2024 Music Impact report, U.S. TikTok users are twice as likely to be music superfans and spend 48% more time streaming music than average listeners. In theory, TikTok could act as an alternate path to success for independent musicians, allowing them to self-promote without the backing of a major label. In the process, artists can engage with fans and allow them to play a central role in music promotion.
TikTok exemplifies both the opportunities and challenges of the music industry in the digital age. While it offers artists unprecedented access to global audiences, it also raises questions about the sustainability of careers built from virality. As the app’s future in the U.S. remains uncertain, so too does its role in shaping the next generation of musicians. One thing is clear: as the digital age continues to expand in unpredictable directions, musicians, true to their nature, will adapt.
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