Last month, amid TikTok’s long-running licensing talks with the major labels, it came to light that the ByteDance-owned platform had started limiting the availability of certain music in Australia. Now, a new report suggests that the pilot – designed to demonstrate the app’s purportedly minimal reliance on popular tracks – brought about a usership decline in the island nation.
This latest twist in TikTok’s evidently lengthy licensing negotiations with the Big Three just recently entered the media spotlight in a report from Bloomberg. For background, TikTok has (particularly during the past year or so) taken a number of steps to broaden its music industry presence, including with the debut of a distribution service called SoundOn as well as a pre-release feature, the rollout of a “talent manager portal,” and the addition of exclusive tracks and performances.
Plus, the short-form app last summer moved to trademark “TikTok Music,” and it subsequently emerged that the rumored streaming-service expansion was factoring into the aforesaid licensing discussions. With ByteDance reportedly suffering massive annual losses in part because of an across-the-board dip in advert revenue, the majors are reportedly demanding a slice of the latter.
It’s against this backdrop that TikTok launched the initially mentioned music-usage limit in Australia, presumably in an effort to enhance its negotiating power with Universal Music, Sony Music, Warner Music, and others.
Of course, if users had remained just as active (or become more active) despite the reduced prevalence of select high-profile songs, logic suggests that TikTok would have emphasized as much when attempting to secure favorable pacts with the majors. Execs simultaneously made SoundOn available Down Under – potentially to prioritize the promotion and reach of indie tracks distributed through their platform, with which multiple acts have popularized (and re-popularized) works.
The music industry, for its part, promptly fired back against the test, and with all manner of governments cracking down on the service over alleged national-security threats, RIAA head Mitch Glazier two weeks ago bluntly declared that “TikTok exploits recorded music to build an audience.”
In any event, TikTok usage dipped in Australia during the test, according to Bloomberg, which cited analyses from Data.ai (formerly App Annie). Specifically, total Australia-based TikTok users “declined for three consecutive weeks after the rollout of the test, and the amount of time people spent with the app fell as well,” per the mentioned report.
The fourth week is said to have delivered something of a rebound while nevertheless remaining “below pre-test levels,” and neither the outlet nor the firm behind the information has publicly identified the precise numbers associated with the reported decreases. Similarly, TikTok – which for obvious reasons appears more focused on fending off a stateside ban – hadn’t commented on the matter at the time of this writing.
But the service reportedly added users in “most markets” outside Australia across the same month-long period. Moving forward, it’ll be worth keeping in mind the reported usage slips as TikTok works to score new licensing deals covering today’s most commercially prominent releases. Notwithstanding the tidal wave of bipartisan scrutiny that it’s facing in the States alone, TikTok earlier in March unveiled a “Series” paywall feature.