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TikTok's indisputable power over influencing music sales

·Head of Yahoo Finance UK
A TikTok logo is seen on a mobile device in Mountain View, California on November 2, 2019 as a photo illustration. Photo by Yichuan Cao/NurPhoto
TikTok has has already amassed 300 million active users outside of China. Photo by Yichuan Cao/NurPhoto

TikTok, the China-born social media video app, is fast becoming one of the most powerful influences on revenue from music streaming for artists.

Chinese tech firm Bytedance, whose last valuation of $78bn (£61bn) makes it the world's most valuable start-up, is behind the app that is dominating the lives of millennials and generation Z. It only launched in September 2016 but, outside of China, it has already amassed 300 million active users and 1.4 billion total installs to date. It is already bigger than Facebook-owned (FB) Instagram in areas such as India, where TikTok has 120 million users.

But as it seems to be on an unstoppable path for growth amongst the world’s (predominantly) younger population, it has had a significant impact on music streaming sales for artists.

The power of ‘sounds’

For those not initiated into the phenomenon, TikTok videos use either user generated music or commentary, sound from shows, movies, or games, or actual songs or mash-ups by artists, which are called “sounds.”

Users can record videos themselves and either attach their own sound recordings or select a “sound” that is available within the app. Special effects, templates, and video timers are also available.

“Sounds” are then pooled onto their own pages that pull in all videos that use that sound — creating a long list of related videos that usually follow one tone or theme, creating a meme in the process.

Like most trends, popularity dies fast. But during a “sound’s” most popular period on the app, there is a spike in uptake across streaming venues, such as Spotify and Youtube — which is where artists make money.

For example, as pointed out by one TikTok user @ansonseabra, the song ‘Roxanne’ by Arizona Zervas reached the top of Spotify charts recently (as of 12 November, it is seventh in its Global 50 chart) after, seemingly, coming out of nowhere.

At the end of October, the “sound” ‘Roxanne’ went viral on TikTok — usually used against videos of people telling a tale of relationship woes or couple goals. Arizona Zervas’ Spotify playlists consequently skyrocketed, according to music analytics tool SoundCharts:

Arizona Zervas' total playlists followers. Chart: SoundCharts
Arizona Zervas' total playlists followers. Chart: SoundCharts

Spotify pays about $0.006 to $0.0084 per stream to the holder of music rights. Spotify counts streams as a song that has been streamed for over 30 seconds. Therefore, for every 1 million streams Spotify pays around $6,000 to $8,400.

Currently, ‘Roxanne’ is, by far, the most popular song from the artist, and has a total of 38 million streams. That means, he has earned (before any potential split in profits from record companies, producers, and others) between $228,000 and $319,200.

Graphic: Spotify/Yahoo Finance
Graphic: Spotify/Yahoo Finance

And that’s just on Spotify. Looking at Arizona Zerbas’ fanbase over other platforms shows that there will be added streaming and indirect revenue too.

Arizona Zervas' total fans, followers, subscribers by platform. Chart: SoundCharts/Yahoo Finance
Arizona Zervas' total fans, followers, subscribers by platform. Chart: SoundCharts/Yahoo Finance

But this isn’t just a one off — currently there are several songs on Spotify’s Global Top 50 list that are incoming, outgoing, and currently popular TikTok “sounds”, such as ‘Ride It’ by Regard and ‘Lalala’ by Y2K and bbno$.

TikTok’s influence on streams is undeniable. Regard only lists five songs on Spotify and ‘Ride It’ currently has 135.6 million streams. Streams of other songs range from 259,000 to 655,000 (one of which is a ‘Ride It’ remix). ‘Lalala’ has proved even more popular with 352.9 million streams to date.

And at the top of Spotify’s Global 50 list is Tones and I’s ‘Dance Monkey’ — which is currently prolifically used on TikTok.

It has a total of 472.7 million streams — equivalent to between $2.8m to $3.9m — driven by its spike in popularity on TikTok from October onwards, which boosted followers on other platforms.

Tones and I' total fans, followers and subscribers, by platform. Chart: SoundCharts
Tones and I's total fans, followers and subscribers, by platform. Chart: SoundCharts

"TikTok supports the music industry by offering a unique platform for music to live,” said Farhad‌ ‌Zand,‌ ‌Head‌ ‌of‌ ‌music‌ ‌partnerships, TikTok‌ ‌Europe‌.

“Artists can promote their music to a global audience and build a strong and engaged fanbase. Due to its global reach and high engagement, TikTok lets new music talent to be discovered through unprecedented viral trends such as Lil Nas X or more recently DJ Regard. Overall, the platform facilitates new music discovery as it enables its global community to discover new artists and music while creating authentic and entertaining content."