TikTok ban moves closer to reality with Senate and Presidential approval (Photo: Ian Hutchinson)
The music industry is pondering what happens next as the ink dries on President Biden's approval of Congressional legislation that includes an order to sell TikTok. DMN Pro subscribers have already parsed out a detailed breakdown of the potential winners and losers after the TikTok ban, thanks to our thorough whitepaper on the subject.
For those who just watched recently: Congress recently passed, and President Biden just signed, a bill that would require Chinese parent company ByteDance to sell TikTok within about nine months. If that doesn't happen, the app could be banned in the US.
The bill grew out of national security concerns about China's access to U.S. user data and the potential for spreading propaganda. Teenage TikTokers don't understand the seriousness of the threat, but their votes literally only matter here.
Implementation of this law is likely to be very complex. The New York Times neatly sums it up: “The law now faces court challenges, a lack of qualified buyers, and hostility from the Chinese government.”
TikTok plans to challenge the sales mandate almost immediately in court, arguing that it violates the First Amendment rights of the company and its users. As well as the technical challenges of separating TikTok's technology from its Chinese parent company, finding a qualified buyer with sufficient funds and government approvals will also be a challenge.
Furthermore, China's role is also an important factor. Chinese government officials oppose the forced sale of TikTok and the resulting ban on TikTok. China could impose export controls to block the sale of core technology, such as TikTok's recommendation algorithm, or retaliate against U.S. companies as a result of such sales.
All in all, we expect the coming months (and years) to be tumultuous as this divestiture mandate unfolds. Legal battles, the search for a qualified buyer, and potential Chinese intervention will have a major impact on TikTok's ultimate fate in the United States.
But TikTok could disappear from the U.S.-based app world if legal challenges and buyers exhaust options.
TikTok's ban will be good news for competitors like Meta, YouTube, and Snap, which are expected to receive an onslaught of traffic. However, for different sub-sectors of the music industry, this development will prove more complex.
In our latest whitepaper, DMN Pro takes a thorough look at the winners and losers of the post-TikTok music industry, from major labels to DSPs, artists to UGC competitors. In each case, we also analyze the potential impact over different time periods, with significant industry changes likely to materialize in the longer term.
DMN Pro subscribers can access the report here to start strategic planning for “What's next?” If you're not already a subscriber, you can become her DMN Pro member here.
Let's take a look inside here.
Report Contents Introduction: The post-TikTok music landscape could spark unprecedented change – with implications for fans, artists, and companies alike Record labels: TikTok’s BanGraph puts majors and indies on several fronts You could lose in (and win in others): Breakdown graph of global recorded music revenue from UGC and ancillary licensing sources: 2023 global recorded music revenue publishers by segment: short-term losses, Potential for long-term improvement, especially for small indies Songwriters: The potential for increased licensing revenue won't be offset quickly Artists: Post-TikTok, discovery setbacks for DIY professionals at all career stages Chart of how artists will be affected professionally in the short term: Social media followers, YouTube subscribers, and monthly Spotify listeners for selected artists.
Superstars and Legendary Artists Mid-Level Artists with a Significant Following Developing and Emerging Artists Pretraction Artists Graph: Breakdown of Emerging Artists by Home Country in 2023 Competing UGC Platforms: Reels, Shorts, and More is the clear winner for overall licensing revenue: Incidental setbacks aside, TikTok ban will have minimal impact on licensing revenue Graph: Universal Music estimates TikTok revenue and perpetual download revenue, 2020-2023 Non-label sync platforms: Post-TikTok industry could look different with sync platforms and music libraries Fans: More than a disappointment for fans, TikTok ban dramatically impacts music discovery DSP: TikTok bans What does it mean for Spotify, Apple Music and YouTube Music? Promoters and venues: The importance of a TikTok ban in live music Report summary: Many changes in the music landscape since TikTok Date by date: TikTok timeline regulatory investigation; One infographic from December 2022 to April 2024: Winners and losers after TikTok