“I think we can coexist with record labels and publishers and do what we’re doing with SoundOn, and I think it can be one happy value-creating family” these are the words of Ole Obermann, TikTok’s global head of music.
SoundOn is TikTok’s song-distribution and artist-services platform which launched between March and September of 2022, depending on the territory. Since its launch, SoundOn is looking more and more like a record-label competitor. The company is currently recruiting SoundOn hires to “identify, sign, and develop new artists” and to “design live show and merchandise strategies for artists globally.”
Signing artists directly could be a significant move for TikTok, which has already established itself as a formidable player in music discovery. It would be impossible to ignore the massive effect the app has had on music discovery.
“It’s the most important thing that’s happened in the music industry in a long time,” said Jonny Kaps, cofounder and CEO of the independent label +1 Records. “It just allows us to build a new artist audience in a way that we’ve never really been able to do before.”
The effect has grown to the point of frustration for labels and artists alike with talent and potential being ignored over TikTok statistics (it is almost impossible to get a good deal these days without super high Reel and TikTok engagement). Since TikTok’s app regularly sparks trends that help songs go viral, making it a favourite of marketers at major labels and independents, why not use its influence to make its own artists take off?
Having said that, labels do possess some power. If the major labels withhold their music from TikTok — even temporarily as a negotiating tactic to force better terms — it could damage the app’s prospects. Users listen to licensed songs around 3 trillion times across roughly 2 billion videos each month, Obermann said during his September panel. The company recently experimented with limiting access to songs for users in Australia in an apparent test of its reliance on licensed music. In doing so, it lost customers.
There are also some cautionary tales preventing TikTok from launching an app. Spotify tested a feature that allowed artists to upload music directly to its app in 2018, but shut down the program within a year.
“TikTok has to find that balance with not pissing off the major labels,” said a music marketer to Insider who has worked with the company and asked to remain anonymous to protect their business relationship. “If they want to keep this SoundOn thing going, they’re just going to have to figure out how to make sure that they’re also sharing some of that secret sauce they have or what they’re using for SoundOn with rights holders.”
TikTok works closely with record labels and artists on promotional efforts like livestreamed concerts, in-person performances, and private listening parties with TikTok stars. Major labels can pay to promote music via TikTok’s ads portal, and regularly pitch TikTok’s in-house music team to feature artists in its app, said Cesar Toirac, director of marketing partnerships at Warner Music Latina. All the jockeying that artists, record labels, and music marketers do to boost plays on TikTok signals how powerful the company’s influence over music could become if it commits to signing its own talent via SoundOn.
For now, Obermann describes SoundOn as a distribution service that makes it possible for an unsigned creator to upload music to TikTok and earn money right off the bat. The company has seen a number of SoundOn artists eventually sign record-label deals, he said.
SoundOn, which was released about a year ago, is still a young product, and some artists have complained about issues with its distribution services. But the platform has also launched a few big winners, including artists like Justine Skye and Nicky Youre, whose single “Sunroof” entered the Billboard 100 last year after blowing up on TikTok.