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Have the streams stopped after the music catalog was withdrawn?

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There is little doubt that TikTok is driving the discovery of new and unknown music. How much engagement it creates downstream – on on-demand music streaming platforms – is less clear.

It's been about two months since Universal Music Group announced its decision to remove its catalog from TikTok after the companies' licensing agreement ended on January 31. To find out if TikTok's absence has hurt UMG's streaming numbers, billboard examined Luminate's weekly market shares for UMG as well as for Sony Music and Warner Music Group, going back to early 2023.

The conclusion? So far, there is no clear evidence that UMG's US market share has been affected by the removal of its catalog from the hugely popular platform. From the week ending February 8th to the week ending March 28th, UMG's market share did not deviate from what could be described as normal trends. Importantly, the company hasn't suffered a major slump during his absence from TikTok – neither in market share nor in chart appearances.

In the eight weeks since TikTok began removing UMG's catalog after its licensing agreement expired, UMG's overall market share in on-demand audio streaming (using a four-week rolling average to smooth out fluctuations). ) decreased by 1.8% – not 1.8 percentage points – 38.72% to 38.02%. Most of this decline is due to a 5.8% decline in market share of current (less than 18 months old) titles (from 34.42% to 32.43%) – a completely normal fluctuation that reflects the ups and downs of the a music company's new release schedule. Since the start of 2023, UMG's eight-week change in current market share (again using a four-week moving average) has fallen by more than 5% five times. Sony Music experienced declines of 5% or more six times. Warner Music Group has seen it seven times.

Catalog market share (music older than 18 months) is less determined by music companies' new release plans, but also tends to show small increases and decreases. In the eight weeks ended March 28, UMG's catalog market share fell 0.8% (from 40.01% to 39.7%). This wasn't out of character; WMG fell 0.9% over the same period. Going back to the beginning of 2023, UMG's catalog market share increased by more than 1% six times and fell by more than 1% four times. UMG's competitors' market shares in the catalog fluctuated more than 1% more frequently than UMG's.

Given the importance of on-demand audio streaming for record labels, a loss of market share would put a strain on UMG's coffers. According to its 2023 annual report, UMG's record labels received approximately $6.17 billion in royalties from streaming in 2023. A drop in streaming revenue of just 5% is worth over $300 million per year. TikTok, on the other hand, is a relatively small part of UMG's business. The previous licensing deal with TikTok was worth about 1% of UMG's annual revenue, CFO said Boyd Muir As stated in the company's earnings release dated February 28th – this equates to $120 million per year based on total revenue in 2023.

TikTok has a well-deserved reputation for driving the chart success of tracks – from Glass Animals' “Heat Waves” to Doja Cat's “Paint the Town Red” – by increasing their exposure and driving downstream traffic on on-demand streaming. services generated. A 2023 TikTok study conducted by Luminate found that higher TikTok engagement is associated with higher streaming volume, and that TikTok users in the U.S. are more likely than average to both stream music and watch a music video. Subscribe to streaming service. TikTok engagement also went offline: The study found that 38% of TikTok users in the US attended a show and 45% purchased merchandise in the last 12 months – suggesting above-average levels of engagement with music.

However, there is evidence that TikTok is less valuable for music discovery than music streaming services that still offer the UMG catalog. TikTok users who might discover UMG's music “have plenty of opportunities to find new music and new artists even without TikTok,” MusicWatch's managing partner said Russ Cruppnick told billboard via email, “although admittedly it's an important option.” MusicWatch found that TikTok users are three times more likely to cite their favorite streaming service as their top source for music discovery than TikTok. And two-thirds of TikTok users say music streaming services are a source for hearing new songs and new artists; 49% of TikTok users cite TikTok as their favorite for finding new music.

Still, TikTok's absence means UMG's artists aren't reaching young consumers where they spend much of their time. According to MIDiA Research, TikTok is a particularly popular option for teenagers Tatiana Cirisano. A MIDiA survey of US consumers found that 24% of all respondents listen to songs they first heard on TikTok each month. That number rises to 52% among 16-19 year olds, and 55% of people in this age group say TikTok is one of the three places they discover new music – ahead of YouTube (47%) and music streaming Services (36%).

However, looking at streaming market share data alone does not provide a complete picture. It's entirely possible that UMG was hurt by his absence from TikTok in other ways. If his catalog were available on TikTok, UMG could have scored one or more out-of-left-field viral hits thanks to the unsolicited use of his music by TikTok users. Finally, TikTok can bring old music to light in the expected way.

Furthermore, two months is not enough time to draw major conclusions. “Due to the constant fluctuations in release schedules, as well as the ever-evolving way consumers use social apps, assessment will be required over a much longer period of time.” Chaz Jenkinssays the Chief Commercial Officer of Chartmetric billboard in an email. Additionally, billboard only examined market share in the USA. Global market share data would provide a more comprehensive picture.

Additionally, some artists have found ways to get around the ban. As billboard As reported in February, artists are making acoustic versions of songs, speeding up the recording pace and releasing interviews to stay with their fans. “Artists affected by this are simply becoming more creative on TikTok in terms of how they distribute their music,” said the digital marketing manager at Shopkeeper Management Laura Spinelli.

Despite TikTok's promotional value and ability to rack up hits, the app may be more of a silo than people think: MIDiA also found that 76% of consumers who say TikTok is a primary source for the Music discovery, no need to search for information about an artist after finding a song in the app. In other words, what happens on TikTok often stays on TikTok. Let's see if the impact of UMG's absence from the app will be just as limited.