The European Music Market: Is Tiktok changing the way we consume music?
Lyka Cabatay, Oreoluwa Aremo & Zainab Imraan
Editor: Marlen Komorowski
Music consumption has changed in exciting ways due to social media. Spotify, Apple Music, Tidal, Amazon Music, and many other digital streaming platforms offer a variety of ways to listen to music. Streaming platforms have made music more accessible to a global audience. Some artists were in denial about the effectiveness of TikTok in promoting their music to younger audiences when it was first launched by the Chinese company ByteDance.[1] This belief has quickly shifted since the pandemic. TikTok has brought a drastic change in the traditional ways of launching new music to audiences.
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1. The state of the music market
The music recording industry presents a great example of how businesses must continually transform and adapt to change. According to the analysis of the international streaming market by Music Business Research, powered by IFPI data, as of 2011, over 80% of all markets in the world were dominated by physical sales.[2] The framework for the European Commission’s efforts and operations in the European music market, “Music Moves Europe”, began a project in 2015 with discussions between the European Commission and music industry stakeholders to highlight the sector’s most significant concerns; political and financial support for the industry. The European Commission launched a Structured Dialogue with the music industry in 2019 to investigate potential aspects for further EU assistance for the industry and to exchange information on its progress[3].
The COVID-19 pandemic hit the live music sector the hardest since the end of World War II. The sector has been shut down since March 2020 in most countries. A Live Nation (a US-based large live music conglomerate) report shows that the business activities of concert ticketing organisations have been severely affected by the Covid-19 pandemic. In 2019, Live Nation had its best financial year ever. The consolidated revenue peaked at 10.6 billion EUR, after an increase of 128% since 2010, when Live Nation merged with the world’s largest ticketing company Ticketmaster. The overall revenue for the three quarters of 2020 decreased by 81% to 1.4 billion EUR. The operating income for the first three quarters of 2020 turned into a loss of 495.9 million EUR after a solid profit of 197.1 million EUR in the previous year.[4]
Even though the live music sector got hit the hardest by the COVID pandemic, the streaming sector of the music industry has seen an increase. A report from Grand View Research stated that the music streaming industry is seeing record growth in activity due not only to the lockdown protocols forcing people to consume music through streaming platforms but also the increase in live streaming of music content being readily available for audiences.[5]
2. TikTok’s disruptive effect on culture and the music industry
As social network penetration reaches a plateau, major platforms compete for users in Europe. Social media giant Facebook is losing many young people to newer, more vibrant social networks like TikTok, primarily due to demographic changes.[6] Prompted by the EU’s Digital Services Act following a direct comparison to rival social networks, TikTok has publicly disclosed that they have more than 150 million users across 32 counties in Europe that visit the platform every month.[7]
Regarding TikTok’s cultural impact in the EU, most European TikTok users and creators note that the platform helps them feel part of a community and has offered a new format for self-expression, creativity, discovery, and participation in and sharing cultural expressions across borders.[8] MRC Data’s research reveals that when it comes to music discovery, 63% of TikTokers heard new music that they’ve never heard before on TikTok.[9] Among TikTok users in Europe, 69% admitted that the platform enables them to express themselves freely and share their passions for culture, including music and painting, allowing users to have experiences they can never get in the real world and get inspired by forms of culture from all over Europe and the world they could not obtain otherwise.[10]
The popularity of TikTok has also changed how artists and their music are presented and exposed to a broader audience, as well as how record labels seek out new talent in the music industry. The fact that TikTok is a platform that relies heavily on music is not surprising since 88% of users agree that sound is one of the most essential elements to the TikTok experience. As a result, people are researching, streaming, and purchasing songs they have heard while browsing the app – this creates new opportunities for artists and brands and positively impacts how music is shared, created, and discovered.[11]
From a production standpoint, the app is a great promotional tool for the music industry. It has proven beneficial in terms of its financial impact on the industry. There have been cases where artists have used TikTok’s demographic data to help fuel the release of their upcoming singles by using Influencer marketing to promote their new tracks by simply integrating the song into a video or creating a viral dance accompanies the song. In addition to paying creators to promote their songs on TikTok, record labels also hire micro-influencers and even non-influencer accounts for song campaigns, utilising the platform as a means of artificial virality, stimulating a spark of an idea in user-generated videos that use a particular track.[12] TikTok creators earn thousands of dollars quickly by making promotional videos for an artist’s song. Through TikTok marketing, the music industry gains a financial advantage, like influencers who have built a massive following on the platform.
3. Conclusion
The disruption from TikTok trends shows music is introduced to the market through unorthodox ways like dance challenge short videos – this is an essential competitive advantage. Unlike traditional streaming services, where audiences must search for a particular song to listen to, TikTok is now an excellent way for audiences to gain visibility to both new and different genres of music without actively searching for them. Virality on TikTok is considered unpredictable yet so influential. In the upcoming years, and with the development of artists depending less on traditional music platforms to promote their songs, TikTok may develop into a platform for multiple income streams in Europe’s music industry.
| Recommendation 1 – Social impact on the music industry | |
| Industry experts are encouraged to look deeply into the effects of social media and the music industry. Due to the high increase in digital use, these two sectors are potentially growing and maybe have structured/stronger collaborations. | |
| Recommendation 2 – Using AI to increase industry creativity | |
| AI is currently used in the music industry in various ways. In the next couple of years, it could be more significant than it currently is. The impact of AI should also be closely monitored and redefined to increase the creativity the industry currently provides. | |
| Recommendation 3 – Improving music licensing | |
| Collaborate with the rights holders on both sides, publishing and master, to make licensing clearances faster, easier, and more user-friendly. With this, artists can build sustainable careers in the long run. |
Footnotes
[1] https://theconversation.com/love-it-or-hate-it-tiktok-is-changing-the-music-industry-17148
[2] Pastukhov, D. (2022, March 17). Music Market Focus: China Streaming and Recording Business (Part 1/2). Soundcharts | Market Intelligence for the Music Industry. https://soundcharts.com/blog/chinese-recording-market-streaming
[3] Policy Department for Structural and Cohesion Policies Directorate-General for Internal Policies. (2021, May). Europe’s media in the digital decade [An action plan to support recovery and transformation in the news media sector]. European Parliament. https://www.europarl.europa.eu/RegData/etudes/STUD/2021/690873/IPOL_STU(2021)690873_EN.pdf
[4] Tschmuck, P. (2020, November 18). Music Business Research. Music Business Research. https://musicbusinessresearch.wordpress.com/author/ptjewellery/page/2/
[5] Grand View Research. (2020). Mobile Application Market Size, Share & Trends Analysis Report By Store Type (Google Store, Apple Store), By Application (Gaming, Music & Entertainment, Health & Fitness), By Region, And Segment Forecasts, 2020 – 2027. https://www.grandviewresearch.com/industry-analysis/mobile-application-market/segmentation
[6] Europe Social Network Users 2022. (2022). Insider Intelligence. https://www.insiderintelligence.com/content/europe-social-network-users-2022
[7] Tiktok. (2019, August 16). Investing for our 150m strong community in Europe. Newsroom | TikTok. https://newsroom.tiktok.com/en-eu/investing-for-our-150-m-strong-community-in-europe
[8] Ipsos. (2023). Unlocking Culture in Europe: An assessment of Tiktok’s cultural impact in the EU. https://sf16-va.tiktokcdn.com/obj/eden-va2/hgvkshieh7lssli/Unlocking_Culture_in_EU_TikTok_Ipsos.pdf
[9] Tiktok. (2019, August 16). New studies quantify TikTok’s growing impact on culture and music. Newsroom | TikTok. https://newsroom.tiktok.com/en-us/new-studies-quantify-tiktoks-growing-impact-on-culture-and-music
[10] Tiktok. (2019, August 16). New report by Ipsos shows Europeans turn to TikTok for cultural discovery and creative self-expression. Newsroom | TikTok. https://newsroom.tiktok.com/en-eu/new-report-by-ipsos-shows-europeans-turn-to-tiktok-for-cultural-discovery-and-creative-self-expression
[11] TikTok. (2022, February). TikTok What’s Next Report 2022. https://newsroom.tiktok.com/en-sg/tiktok-whats-next-report-2022-sg
[12] Whateley, D. (2022, June 1). How TikTok is changing the music industry. Business Insider. https://www.businessinsider.com/how-tiktok-is-changing-the-music-industry-marketing-discovery-2021-7?r=US&IR=
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*This White Paper is part of the Student White Paper Series on European Media Markets. It was written with further contributions by Nguyen Huong Ly and Gabija Bertašuite.
The student White Paper Series is part of the European Media Markets course at the VUB. The course was headed in 2022 by Prof. Dr. Marlen Komorowski (marlen.komorowski@vub.be)
Photo by Alexey Ruban on Unsplash