Last month, amid lengthy TikTok licensing negotiations with major labels, it emerged that the ByteDance-owned platform had begun restricting the availability of certain music in Australia. Now a new report suggests that a pilot project designed to demonstrate the supposedly minimal dependence of the application on popular tracks has led to a decrease in the number of users in the island state.
This latest twist in TikTok’s apparently lengthy licensing negotiations with the Big Three most recently came into the media spotlight in a Bloomberg report. For reference: TikTok (especially over the last year or so) has taken a number of steps to expand its presence in the music industry, including with the debut of a distribution service called SoundOn, as well as with a pre-release feature, the deployment of a “talent management portal”, as well as the addition of exclusive tracks and performances.
In addition, the short application switched to the trademark “TikTok Music” last summer, and it subsequently turned out that rumors about the expansion of the streaming service were taken into account in the aforementioned licensing discussions. Since ByteDance is reportedly incurring huge annual losses in part due to the widespread drop in advertising revenue, large companies are reportedly demanding a portion of the latter.
It was against this background that TikTok introduced the originally mentioned restriction on the use of music in Australia, presumably in an attempt to strengthen its negotiating positions with Universal Music, Sony Music, Warner Music and others.
Of course, if users remained as active (or became more active), despite the decrease in the prevalence of selected loud songs, logic suggests that TikTok would have made the same emphasis, trying to conclude profitable agreements with large companies. Execs simultaneously made SoundOn available Down Under – potentially in order to prioritize the promotion and coverage of indie tracks distributed through their platform, through which several artists popularized (and re-popularized) works.
The music industry, for its part, immediately responded to the test, and since all sorts of governments are shutting down the service due to alleged threats to national security, RIAA head Mitch Glazer bluntly stated two weeks ago that “TikTok uses recorded music to create an audience.”
In any case, according to Bloomberg, TikTok usage in Australia declined during the test, citing the analysis Data.ai (formerly App Annie). In particular, according to the aforementioned report, the total number of TikTok users in Australia “decreased for three consecutive weeks after the test was launched, and the amount of time people spent with the app also decreased.”
They say that the fourth week led to some rebound, but, nevertheless, remained “below the levels of preliminary testing,” and neither the outlet nor the firm behind the information publicly announced the exact figures associated with the reported decline. Similarly, TikTok, which is understandably more focused on reflecting the ban in the US, has not commented on this issue at the time of writing this article.
But the service reportedly added users in “most markets” outside of Australia over the same month period. Moving forward, it’s worth keeping in mind the reports of declining usage, as TikTok is working to conclude new licensing agreements covering the most commercially significant releases to date. Despite the tidal wave of bipartisan scrutiny, which he faced only in the States, in early March TikTok introduced the “Series” paid access feature.