There is no doubt that TikTok leads to the discovery of new and unknown music. Exactly how much engagement it generates downstream — on on-demand music streaming platforms — is less clear.
It's been about two months since Universal Music Group announced its decision to pull its catalog from TikTok after the companies' licensing deal expired on January 31. To see if her absence from TikTok has hurt UMG's streaming numbers, Advertising sign looked at Luminate's weekly market shares for UMG, as well as Sony Music and Warner Music Group, starting in 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 listing from the hugely popular platform. From the week ending February 8 to the week ending March 28, UMG's market share hasn't deviated from what would be considered normal trends. Importantly, the company hasn't taken a significant hit — either in market share or chart impressions — while away from TikTok.
In the eight weeks since TikTok began pulling the UMG catalog after the licensing deal expired, UMG's overall on-demand audio streaming market share (using a four-week moving average to smooth out fluctuations) has fallen by 1. 8% — not 1.8 percentage points — from 38.72% to 38.02%. Most of that decline came from a 5.8% decline (from 34.42% to 32.43%) in the market share of current securities (less than 18 months old) — a perfectly normal variation that reflects ebbs and flows of any music label's new release schedule. Since early 2023, the eight-week change in UMG's current market share (again, using a four-week moving average) has declined more than 5% five times. Sony Music fell 5% or more six times. Warner Music Group saw it happen seven times.
Catalog market share (music older than 18 months) is less determined by music companies' new release programs, but also tends to show small increases and decreases. In the eight weeks ending March 28, UMG's catalog market share fell 0.8% (from 40.01% to 39.7%). This was not unusual. WMG fell 0.9% over the same period. Going back to early 2023, UMG's catalog market share gained more than 1% six times and declined more than 1% four times. UMG's competitors saw their catalog market shares fluctuate by more than 1% more times than UMG.
Given the importance of on-demand audio streaming to labels, a loss of market share would hit UMG in the pocketbook. In 2023, UMG's labels received about $6.17 billion in royalties from streaming, according to its 2023 annual report. Just a 5% cut in streaming revenue is worth more than $300 million a 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 Boyd Muir reported on the company's Feb. 28 earnings call — equal to $120 million annually based on total 2023 revenue.
TikTok has a well-earned reputation for charting tracks — from Glass Animals' “Heat Waves” to Doja Cat's “Paint the Town Red” — raising their profiles and generating subsequent release on on-demand streaming services . A 2023 TikTok study conducted by Luminate found that higher TikTok engagement corresponds with increased streaming volumes and that US TikTok users are more likely than average consumers to stream music and subscribe to a music streaming service. TikTok's engagement also carried over offline: The study found that 38% of US TikTok users went to a show in the past 12 months, and that 45% bought some merchandise — suggesting higher than normal levels of music engagement.
However, there are signs that TikTok is less valuable for music discovery than the music streaming services that still offer UMG's catalog. TikTok users who would potentially discover UMG's music “still have many ways to find new music and new artists in the absence of TikTok,” MusicWatch Associate Director Russ Krupnick says Advertising sign via email, “although it is admittedly an important choice.” 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 the music streaming service is a source for listening to new songs and new artists. 49% of TikTok users cite TikTok as their favorite for finding new music.
However, the absence from TikTok means that UMG artists are not reaching the young consumers where they spend much of their time. TikTok is a particularly popular choice for teenagers, MIDiA research notes Tatiana Chirisano. A MIDiA survey of US consumers found that 24% of all respondents listen to songs they first heard on TikTok on a monthly basis. That number jumps to 52% for 16- to 19-year-olds, and 55% of people in that age group say TikTok is one of the top 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 paint the full picture. It's entirely possible that UMG has been hurt by its absence from TikTok in other ways. If his catalog was available on TikTok, UMG could have one or more viral hits out of left field thanks to the unsolicited use of his music by TikTok users. Besides, TikTok can display old music in predictable ways.
Moreover, two months is also too short to draw any big conclusions. “Continued variation in release schedules as well as the ever-evolving ways in which consumers use social networking apps mean that it will need to be evaluated over a much longer period of time.” Chaz Jenkinssays Chartmetric's chief trading officer Advertising sign in an email. Additionally, Advertising sign market share in the US only. Global market share figures would show a more complete picture.
Besides, some artists have found ways around the ban. As Advertising sign reported in February, artists are making acoustic versions of songs, speeding up recordings and releasing interviews to stay in front of their fans. “Artists who are affected by this are just more creative on TikTok in how they put out music,” said Shopkeeper Management digital marketing director Laura Spinelli.
Despite TikTok's promotional value and ability to break out hits, the app can be more siloed than people think: MIDiA also found that 76% of consumers who said TikTok is their primary source of music discovery don't they 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 similarly limited.
