TikTok is right in the jaws of a thorny situation with the U.S. Government regarding its ownership, but it’s sending a clear message today that it is not sitting on its heels with big deals. Yesterday, it announced a deal with UnitedMasters to allow artists on TikTok to distribute their songs directly to streaming services and other partners directly.
UnitedMasters is the un-record-label label — in fact a direct distribution company founded by former president of Interscope Records, Steve Stoute. The firm allows musicians (especially budding ones) to pay a competitive distribution rate to get access to Spotify, YouTube, SoundCloud, Apple Music and other services. It also gets them access to analytics, retargeting, CRM tools and individual deals that UM makes with brands like ESPN and the NBA.
Normally, the path between an artist being able to go viral on TikTok and be included in the next NBA 2k or before an official game on the air would be a long one involving a lot of knives out for pieces of the pie. UnitedMasters shortcuts all of this.
The simple scenario is this:
- An aspiring artist or songwriter puts out a song or riff on TikTok (likely one of many).
- This one has something and it catches on the algorithm and generates numbers.
- The creator opts in to participating in UnitedMasters’ program.
- They give up a cut close to 10% but get direct distribution into the major streaming buckets and potential A-grade partners.
- They can also market things like tickets, merch and more directly to fans using UM’s customer tools.
Which is why a tie up with TikTok makes a hell of a lot of sense. One of the biggest issues with viral social platforms has been the way that they reward creators. Twitter’s Vine, of course, squandered their opportunity there. Even YouTube has had major problems providing consistent revenue to many of its top creators, with a long trend towards big hitters monetizing off platform in order to earn consistent, durable money.
TikTok has already announced a creators fund with a significant purse, but it needs to go beyond that. We’ve seen over and over how young creators on the platform create viral waves of attention for TikTok and millions of re-enactments and remixes. Often, though, those creators are offered little recourse to monetize or benefit from their creations. Dance creators and musical talents, often young Black women, are literally crafting culture in real-time on TikTok and the pathways for them to benefit materially are very rare. Sure, it’s great when an originator gets called out by a Times reporter willing to do the work to trace the source, but what about the thousands of others being minted as a real voice on the platform every month?
It’s beyond time for the creators of The Culture to benefit from that culture. That’s why I find this UnitedMasters deal so interesting. Offering a direct pipeline to audiences without the attendant vulture-ism of the recording industry apparatus is really well aligned with a platform like TikTok, which encourages and enables ‘viral sounds’ with collaborative performances. Traditional deal structures are not well suited to capturing viral hype, which can rise and fall within weeks without additional fuel.
In terms of overall platforms, TikTok clearly has the highest concentration of incredible and un-tapped musical talent on the market. It’s just wild how many creators I see on there that are just flat out as good if not better than what you hear on the radio. Opera, rap, soul, folk, comedy, songwriting, it runs the gamut.
TikTok CEO Kevin Mayer came to the company after a long stint at Disney ending with a very successful Disney+ launch. Almost immediately, he was dropped into a political firestorm between China and the U.S. government. Parent company ByteDance must sell within 90 days, says Trump, or get shut down. Microsoft might buy them. Other tech companies are circling. This deal is a pretty crisp forward-looking signal that TikTok sees a way through this and is not waiting to innovate on one of the trickier components of this era of user generated businesses.
And on top of that, it charts a course for how user generated platforms should look to service creators and keep them in their universe. All UGC plays garner significant value from the creative energies of their users, but few have found a way to make that relationship reciprocal in a way that feels sustainable.
This UnitedMasters deal feels different, and the start of a larger trend that could pay big dividends to platforms and, finally, creators.
