MBW’s Stat Of The Week is a series in which we highlight a data point that deserves the attention of the global music industry. Stat Of the Week is supported by Cinq Music Group, a technology-driven record label, distribution, and rights management company.
TikTok is in the process of reinventing itself as both a partner to music companies, and a competitor to streaming and distribution services.
Now, a new market analysis sheds some light on why the ByteDance-owned short video platform has focused so intensely on expanding its services in the music world, with the firm reporting to be a major driver of music consumption and spending.
While that may not come as a surprise to those who’ve noted the overlap between TikTok and music culture, the numbers in the analysis shine a light on the scale of TikTok’s influence.
According to the analysis, commissioned by TikTok and carried out by US market monitor Luminate, 62% of US TikTok users pay for a music streaming service, compared to 43% of all consumers.
To produce TikTok’s new report, which you can read in full here, Luminate researchers studied data from the US, UK, Germany, Brazil and Indonesia, as well as global data, for a 12-month period from July 1, 2022 to June 30, 2023, and found that “compared to average consumers, TikTok users are significantly more likely to be music streamers”.
We know that TikTok counted150 million users in the United States as of February 2023, which means that, if we look at this stat through the lens of the Luminate analysis, then at this point it appears that approximately 93 million TikTok users in the US are paying for a subscription to one of the various streaming services available in the United States, including Spotify, Apple Music and others.
To put into context the number of music subscribers at individual streaming services in the market, we reported in July that as of February, in the United States, Spotify counted44.4 million paying subscribers, while Spotify rival Apple Music had 32.6 million subscribers, and Amazon Music had29.3 million subscribers.
The new TikTok study looked at consumption data from Luminate Connect, audience insight from the Luminate Music 360 Study, and TikTok engagement volumes provided by the platform in five markets: the US, UK, Brazil, Indonesia, and Germany, as well as globally (see below).
Including both paid and ad-supported streaming services, roughly nine out of 10 TikTok users in each market studied used at least one music streaming service.
In the US, 89% of TikTok users subscribed to at least one music streaming service, compared to 74% of overall consumers, while in the UK, 85% of TikTok users had a streaming service account, compared to 62% of consumers overall.
“In the global and US markets, TikTok user engagement metrics are strongly associated with streaming volumes. In other words, higher TikTok engagement — whether that’s likes, views or shares — corresponds with elevated streaming volumes,” the Luminate report stated.
However, TikTok’s impact on music isn’t limited to DSPs. The analysis found that TikTok users are also larger spenders on music off-platform as well. By wide margins, they are more likely to buy merch and attend live shows than the average consumer.
In the US, 45% of TikTok users bought music-related merch over a 12-month period, compared to 35% of overall music listeners. Meanwhile, 38% attended a live music event during the year, compared to 33% of overall music listeners.
Overall, US TikTok users spent 22% more on music-related purchases, compared to overall music listeners. A similar pattern was found in the four other countries they study looked at.
The study also found that the TikTok audience can be an effective marketing tool for artists, as TikTok users, in particular, are considerably more likely to discover and share music than overall social media and short video platform (SFV) users.
In the UK, TikTok users were 108% more likely to discover and share music than other social media users, while in Germany, they were 100% more likely. US TikTok users were 71% more likely to discover and share music.
“In doing so, TikTok users help both emerging and established artists to reach new audiences,” the Luminate report stated.
The study found that TikTok’s platform appears to be a major driver of the glocalization of music – the trend of local artists, performing in local languages, being elevated to a regional or global platform.
“TikTok users have a stronger preference for international music than the average music listener,” the report said. “This preference, combined with the high volume of music discovery and sharing activity on TikTok, can be harnessed to grow a fanbase without borders and has helped to launch global artists from genres such as Reggaeton, Afrobeats and K-Pop.”
The report added: “TikTok users‘ interest in international music is evident in their music streaming preferences. Compared to the average music listener across each market, this audience is more likely to indicate that ‘access to music by global artists’ is an extremely important factor when selecting a music streaming service.”
“TikTok is already famous for being the launchpad for creating viral hits and breaking new artists, but we wanted to understand how TikTok and its users impact the music industry more broadly,” Ole Obermann, TikTok’s Global Head of Music, said in a statement.
“Luminate’s findings prove what we had long known: that TikTok is the driving force behind music discovery in the industry, and that TikTok users are active, engaged and highly valuable drivers of music industry revenues.”
The new study is part of an ongoing effort by TikTok to highlight its growing role in the development of global music culture. Last year, TikTok released a report asserting that 13 out of the 14 songs to reach number on the US Billboard Hot 100 in 2022 were driven by viral trends on TikTok.
The data clearly shows why TikTok has focused so heavily on developing music-related services, to the point that one could be forgiven for thinking the company plans to reinvent itself as a part of the music industry.
“Luminate’s findings prove what we had long known: that TikTok is the driving force behind music discovery in the industry, and that TikTok users are active, engaged and highly valuable drivers of music industry revenues.”
It quickly expanded the service to Australia, Mexico and Singapore, though without Universal’s catalog.
This past October, TikTok announced it would be holding its first-ever live music event, dubbed “TikTok In The Mix.”
The same month, it struck a deal with Distrokid to have indie artists upload their music to TikTok Music and to Capcut, TikTok’s video editing software, as well as to TikTok’s Commercial Music Library, which offers a catalog of music for brands to use in their TikTok ads.
Meanwhile, TikTok parent ByteDance has launched an AI music-making app, and most recently, TikTok unveiled the “Add to Music App” feature, which enables TikTok users to save music they’ve discovered directly to their Apple Music, Amazon Music (Prime or Unlimited) or Spotify accounts.
These new partnerships indicate that TikTok is moving away from what at times appeared to be a trying relationship with the music industry. In one notable incident, TikTok disabled the use of copyrighted music for users in Australia, in what the platform described as an experiment, and what many observers saw as a hardball tactic in its licensing negotiations with music rights holders.
One remaining – and major – potential pitfall for TikTok has to do with the rise in tensions between China and Western countries.
Amid concerns that parent company ByteDance may be sharing TikTok user data with the Chinese government, numerous governments – from the US to the European Union to Australia – have banned the app from government-issued devices.
A small number of jurisdictions have banned or are attempting to ban TikTok altogether, including Montana and, most recently, Nepal.
