TikTok stops playing Universal's songs. No problem, Ai will replace them

Last week, Universal Music Publishing Group released this statement on their Instagram account.
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The background

Universal Music Group and TikTok clashed over royalty payments for songs affiliated with the music label and played on the social media platform.

Negotiations failed because TikTok reportedly wanted to pay only a low-single digit percentage of advertising revenue, in contrast to the 20% that YouTube, for example, pays to Universal.

Therefore, Universal withdrew their license, forcing TikTok to stop playing its music catalogue, which includes artists like Taylor Swift and Drake.

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The Impact.

Over the past few weeks, TikTok has muted all recordings owned by Universal. But it didn’t stop there. It also muted songs written or co-written by artists affiliated with the major.

Some analysts predict that 60-80% of all the popular music on TikTok will be muted, although the Chinese giant claims the figure is closer to 30%. Still, it’s a huge deal, impacting at least one-third of all songs played on TikTok.

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The Future.

Reality is, TikTok can live without mainstream hit songs.

Why?

Because regular users can now create catchy tunes using AI. In fact, TikTok plans to pay an advertising cut to AI-music creators as well.

AI-generated music is perfectly suited for accompanying TikTok videos. In fact, it may even perform better as it can be tailored specifically for this purpose. In near the future, we may have tools to create music directly from existing videos.

Like every industry, the music industry is also being disrupted by AI. The only way to survive is by improving the quality of its output. The formula for mass-produced summer hits won’t work anymore, at least from a streaming point of view.

Instead, TikTok should be used as a marketing tool by labels and artists to generate revenue elsewhere, such as live shows. Taylor Swift demonstrated this model with her Eras Tour.

As a marketing professional myself I know that marketing is a cost center, not a profit one, at least not directly. Therefore, I don’t see how music companies can expect significant revenue from a marketing too like TikTok.

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