A TikTok ban edges closer to reality following Senate and Presidential approvals (photo: Ian Hutchinson).
The music industry is pondering what happens next as the ink dries on President Biden’s authorization of a Congressional bill that includes a TikTok divestiture order. DMN Pro subscribers have already parsed through a detailed breakdown of the potential winners and losers following a TikTok ban, thanks to our exhaustive white paper on the topic.
For those just tuning in: Congress recently passed — and President Biden just signed — a bill that mandates that Chinese parent company ByteDance must sell TikTok within roughly nine months. If that doesn’t happen, the app faces a ban in the United States.
The legislation springs from national security concerns regarding Chinese access to American user data and the potential for propaganda dissemination. Teenage TikTokers aren’t sold on the seriousness of the threat, though their votes only have so much impact here — literally.
The law’s implementation will likely be highly complicated. As the New York Times neatly sums up: “Now the law faces court challenges, a shortage of qualified buyers, and Beijing’s hostility.”
Almost immediately, TikTok will challenge the sale mandate in court, arguing it violates the company’s and its users’ First Amendment rights. Finding a qualified buyer with sufficient funds and government approval also poses challenges, as does the technical difficulty of separating TikTok’s technology from its Chinese parent company.
Furthermore, China’s role is a significant factor. Chinese government officials have opposed a forced sale of TikTok or a resulting TikTok ban. It’s possible China may enact export restrictions that block the sale of core technology like TikTok’s recommendation algorithm or retaliate against American companies as a result of such a sale.
Overall, the coming months (or even years) promise a turbulent period as this sale mandate unfolds. Court battles, the search for a qualified buyer, and potential Chinese interference will heavily influence the ultimate fate of TikTok in the United States.
However, after legal challenges and buyer options are exhausted, TikTok could disappear from the US-based app landscape.
A TikTok ban would be great news for competitors like Meta, YouTube, and Snap, who are expected to receive traffic onslaughts. But the development will prove more complicated for the various sub-sectors of the music industry.
In our latest white paper, DMN Pro takes an exhaustive look at the post-TikTok music industry’s winners and losers, from the major labels to DSPs and artists to UGC competitors. In each case, we also analyze the potential impact over various time horizons — with potentially significant industry changes materializing over the longer term.
DMN Pro subscribers can access the report here and start the ‘what’s next’ strategic planning. If you’re not yet a subscriber, you can become a DMN Pro member here.
Here’s a peek at what’s inside.
REPORT TABLE OF CONTENTS
Introduction: The Post-TikTok Music Landscape Could Give Rise to Unprecedented Changes – With Implications for Fans, Artists, and Companies Alike
Record Labels: Majors and Indies Stand to Lose in Several Areas (and Win in Others) With TikTok’s Ban
- Graph: A Breakdown of Global Recorded Music Revenue from UGC and Ancillary Licensing Sources
- Graph: 2023 Global Recorded Music Revenue by Segment
Publishers: Short-Term Losses, Particularly for Smaller Indies, Could Make Way for Long-Term Improvements
Songwriters: A Possible Licensing Revenue Upside Won’t Offset Immediate Discovery Setbacks, Especially for DIY Professionals
Artists: Post-TikTok, Artists At All Career Stages Will Suffer Varied Near-Term Professional Consequences
- Graph: Selected Artists’ Social Media Followers, YouTube Subscribers, and Spotify Monthly Listeners
Superstar and Legendary Artists - Mid-Level Artists With Substantial Followings
- Developing and Emerging Artists
- Pre-Traction Artists
- Graph: A 2023 Breakdown of Emerging Artists by Home Country
- Graph: Selected Artists’ Social Media Followers, YouTube Subscribers, and Spotify Monthly Listeners
Competing UGC Platforms: Reels, Shorts, and Others Will Be the Clear Winners
Overall Licensing Revenue: Ancillary Setbacks Aside, TikTok’s Ban Will Have a Minimal Licensing Revenue Impact
- Graph: Universal Music’s Estimated TikTok Revenue Versus Permanent Downloads Revenue, 2020 – 2023
Non-Label Sync Platforms: The Post-TikTok Industry May Look Different for Sync Platforms and Music Libraries
The Fans: More Than a Letdown for Fans, TikTok’s Ban Will Dramatically Affect Music Discovery
DSPs: What Does a TikTok Ban Mean for Spotify, Apple Music, and YouTube Music?
Promoters and Venues: The TikTok Ban’s Significance for Live Music
Report Summary: The Post-TikTok Music Landscape’s Many Changes
By the Dates: A Timeline of TikTok Regulatory Scrutiny, December 2022 – April 2024
One-Sheet Infographic: The Post-TikTok Winners & Losers
