[zcrar70]

My understanding of what is happening:

* Universal want TikTok to pay similar fees for use of music as other online platforms such as YouTube ($0.004 per stream) or Spotify ($0.0039 per stream for US listeners)

* TikTok views its platform as a means for artists to promote their music, and therefore doesn't think it should be paying anywhere near as much

Interestingly:

- there was a similar argument for the value of radio plays (pre-internet). Radio stations viewed themselves as a way to promote the artists' work, and argued that they therefore shouldn't pay any royalties.

- this has since been settled resolved in favour of the music makers; from what I can see, in the UK, BBC Radio 1 pays around £40/minute in royalties

- the amount of royalties an artist receives from the record company varies significantly, but is usually in the order of 10-20% (Taylor Swift will have a better deal than a small indie band); plus any publishing revenue. Some artists also have different percentages for different types of revenue (e.g. streaming vs CD sales)

- this article has a good overview of how royalties get split for streaming in the US: https://www.billboard.com/pro/music-streaming-royalty-paymen...

My view:

* TikTok should pay royalties for the music it uses (music is an integral part of the package that makes them so hugely profitable)

* UMG should pay artists a higher proportion of streaming (and other) revenues

* streaming companies should be paying more per stream (may imply a price increase for streaming services)

[epolanski]

> * Universal want TikTok to pay similar fees for use of music as other online platforms such as YouTube ($0.004 per stream) or Spotify ($0.0039 per stream for US listeners)

I don't think TT should pay such rates.

1) People don't go on TT specifically to listen that music

2) The music is generally a companion to the video which is centered on some silly dance or something

3) You hear fractions of the record 99.9% of the time.

I guess TT could and should negotiate to pay on the % of the time the song is listened. E.g. if a recording lasts 300 seconds, 10 views lasting 30 seconds should pay the entire royalty as in Spotify/Youtube.

[tlb]

That's the case now, but things can change. YouTube was originally not much of a platform for listening to music, and probably tried to make the same argument that it was all discovery. Now it's a common alternative to Spotify, so the music owners must be relieved they didn't give them a special low rate.

[mathgeek]

> I guess TT could and should negotiate to pay on the % of the time the song is listened. E.g. if a recording lasts 300 seconds, 10 views lasting 30 seconds should pay the entire royalty as in Spotify/Youtube.

This doesn’t work because publishers end up creating versions that are scaled to increase profits.

[theshrike79]

> 3) You hear fractions of the record 99.9% of the time.

You hear 10-20 second snippet of the song, pitched up and sped up.

[IanCal]

> this has since been settled resolved in favour of the music makers; from what I can see, in the UK, BBC Radio 1 pays around £40/minute in royalties (around 10,000 times more than Spotify)

That's not a comparable figure, there can be millions of people listening.

[zcrar70]

You are quite right, the structure for radio is different than for streaming. Also, at the time, records / CD / cassette sales were significantly higher than they are now, so artist revenue from radio then was a much smaller proportion of the total than streaming is today.

What I found interesting was the precedent; the argument that radio was a means to promote artists, and therefore shouldn't pay royalties, was discounted even in those (to artists) much more favourable circumstances.

[toyg]

But TikTok wants to pay; they just don't want to pay as much as UMG says they should. The principle is not in doubt.

[pbmonster]

> BBC Radio 1 pays around £40/minute in royalties (around 10,000 times more than Spotify)

This assumes BBC Radio 1 has only one listener, which is probably underestimating the popularity of radio, even today.

[zcrar70]

You are right, they are not comparable; I have removed the comparison to the Spotify rate from the parent comment to avoid distracting from the precedent (which was the aspect I found most interesting).

[Ekaros]

I have understood that TikTok is per view generating less revenue than YouTube for example. As such they simply cannot pay as much. Which seems entirely reasonable. You cannot pay more out than you generate in income. At least not without someone keeping pouring money in...

[zcrar70]

Some counter-arguments:

- TikTok revenues were estimated at $9.4 billion in 2022, at a $75bn valuation. Add revenue is projected to rise to $22bn in 2024. ByteDance (parent company) profit estimated at $6bn in 2023. They seem to have enough money to pay for the content which enables this growth (this may not just apply to the music element).

- The fact that they don't generate as much revenue per stream as YouTube is of no use to the artists whose works they are using to generate that revenue. Their work is still being used; and they should be paid for that usage. If TikTok's business model doesn't support payments to the artists, then that is TikTok's problem to solve - not the artists'.

I think a good argument is the point above that as only a fragment of a song is typically used, the amount should perhaps not be as much as a full song stream e.g. on Spotify or YT Music. Though that does open the question as to whether a stream of a Pink Floyd song should be paid as much as a stream of a Ramones song - given the difference in length!

[fuzzfactor]

>TikTok is per view generating less revenue than YouTube

plus appartently there is not proper consideration for

>the difference in length!

Oh, well.

There's lots of unresolved fundamentals when revenue is not coming in per view or per length, but people are trying to use things like this as a KPI.

Misguideds gonna misguide.

For the vast majority of artists and music lovers, the ideal model so far is not a "business" model, more along the lines of the free sharing proven by the likes of Napster. Artists didn't make any money off of Napster, but most of them don't make any money from rights organizations either, or when they do it's closer to zero than it is significant.

The only way to surpress the free file sharing was to offer a paid service that was insignificant in cost to so many mainstream consumers that it was marginally viable, and go from there. Consumers paying for it in some way was the main consideration, not paying the artists very much. So this is all we got now and ever since.

Until the price rises enough to no longer be insignificant, and naturally triggers Napster-like procedures to trend back toward becoming undisrupted.

There's just not enough money for any significant middlemen between an artist and the lovers of their music.

With more than one rights brandisher "competing" by failing to lower consumer prices as the streaming services splinter, and trying to prolong a business model where the artist gets less than the majority of revenue generated, all that's got to lead to alternatives where once again the savvy consumers get everything free and the rightsholders and their artists get nothing directly.