TikTok has refuted recommendations by France’s recorded music physique SNEP that short-form video companies ‘divert’ music followers from subscription streaming companies.
Final week, SNEP, the recorded music business physique in France, reported its H1 income numbers for the world’s sixth-largest recorded music market.
SNEP, which reported that France generated recorded music revenues of €397 million within the first half of 2023, with the market rising 9.4% YoY, advised in its report that short-form video platforms “forestall the … subscription mannequin from growing”.
Inside its H1 report, SNEP famous that with earnings of €232 million, subscription streaming was the market’s greatest income generator in H1 2023, accounting for 59% of complete revenues (versus 58% in H1 2022 and 56% in H1 2021).
SNEP additional opined, nonetheless, that subscription streaming’s 10% YoY progress within the French market “stays too gradual… in comparison with the huge adoption of [subscription streaming] in different main historic markets for recorded music”.
SNEP then turned its consideration to ad-supported platforms – particularly short-form video companies like TikTok.
As you may see within the chart under, promoting cash from ‘free’ streaming and video platforms mixed accounted for 18% of complete recorded music revenues in France in H1 2023 (with 9% generated by ad-funded video platforms and 9% generated by ad-funded audio platforms).
In an announcement issued final week, SNEP Basic Supervisor Alexandre Lasch claimed that “the market share of those advertising-based segments mannequin demonstrates the issue of growing a strong subscription market and hampers worth creation” in France.
Later in its report, SNEP said [translated] that “the French market is characterised by the… better [market] weight than elsewhere of ad-supported streaming companies, whether or not audio or video”.
It added: “These are the segments that make the smallest contribution to artists’ and producers’ remuneration, whereas capturing – particularly for video companies like TikTok – a most variety of customers and music listening time.”
“[Short-form video services] forestall the virtuous subscription mannequin from growing, by diverting, from [subscription services] a public that’s strongly dedicated to music, however which finally settles for excerpts lasting a number of seconds with out discovering and listening to the tracks of their entirety through paid streaming companies.”
SNEP H1 2023 report
SNEP cited an IFPI Music Client Research from 2022 that confirmed “music is on the coronary heart of 64% of movies consumed” through short-form video functions.
The commerce physique added that, as short-form companies like TikTok unfold “quickly the world over” loads of their attraction relies “on the music that floods the content material they broadcast”.
In keeping with SNEP, short-form video companies like TikTok “thus forestall the virtuous subscription mannequin from growing, by diverting from [subscription services] a public that’s strongly dedicated to music, however which finally settles for excerpts lasting a number of seconds with out discovering and listening to the tracks of their entirety through paid streaming companies.”
Responding to the suggestion that short-form streaming companies, together with TikTok, divert customers from paid-for streaming within the French market, Ole Obermann, TikTok’s International Head of Music Enterprise Growth has categorically denied that that is the case.
In an announcement issued to MBW, Obermann mentioned: “There is no such thing as a proof to recommend that TikTok is diverting music followers away from subscription streaming companies.”
“Removed from being a menace to streaming subscription uptake, TikTok is an important a part of the music ecosystem, the place discovery on TikTok results in better consumption and worth era, each on- and off-platform.”
Ole Obermann, TikTok
Obermann added: “Quite the opposite, TikTok is the world’s main platform for music discovery and promotion, the place each day tens of millions of individuals uncover each new and catalogue tracks, which they then take pleasure in as full size tracks on DSPs – as clearly evidenced by the correlation between a observe’s early success on TikTok and its subsequent success on streaming companies.
“Removed from being a menace to streaming subscription uptake, TikTok is an important a part of the music ecosystem, the place discovery on TikTok results in better consumption and worth era, each on- and off-platform.
“And, with the purpose of constructing the person journey from discovery on TikTok to full-track streaming even simpler, we’re at the moment trialling a product which can assist customers stream music found on TikTok straight on their most well-liked DSP.”
France’s general recorded music progress outpaced that of some notable international locations on IFPI’s checklist of the world’s greatest recorded music markets.
In Germany, for instance, the world’s fourth-largest recorded music market, recorded music revenues grew 6.6% YoY within the first half of 2023.
The US recorded music business, in the meantime, which generated USD $15.9 billion in 2022, grew 6.1% YoY in FY 2022 (H1 2023 outcomes for the market aren’t accessible simply but).
Obermann was additionally eager to spotlight latest examples of artists who noticed streaming success alongside reaching virality on TikTok.
“I additionally need to spotlight the large worldwide success of Jain with Makeba – an unbelievable instance of music discovery (and rediscovery) on TikTok which led to worldwide streaming success,” mentioned Obermann.
“Makeba (which was initially launched in 2015) has develop into a large world hit on TikTok this 12 months, the place it was utilized in over 13m creations, and was TikTok’s No.1 Track of the Summer season within the US.
“Jain’s success on TikTok drove a whole bunch of tens of millions of streams throughout the DSPs, making her the No.1 French feminine artist on Spotify with 14.8m month-to-month listeners, and taking her to #1 on each the International Viral Spotify Chart and the International Shazam chart.
This isn’t the primary time that SNEP has advised TikTok is the explanation behind France’s “struggling” subscription progress, and never the primary time that TIkTok has denied the declare.
In March, SNEP revealed its annual recorded music income outcomes, by which it reported that the market generated recorded music revenues of €920 million (USD $967m) in 2022.
SNEP’s MD, Alexandre Lasch advised in an announcement on the time that TikTok’s “huge use diverts customers from subscription-based companies, the drivers of at present’s music enterprise mannequin”.
SNEP additionally famous in its report that TikTok and short-form movies “have re-shuffled the deck in relation to music streaming”.
SNEP reported that paid subscription-based streaming, which generated revenues of €426 million ($448m) in 2022, was France’s fundamental driver of recorded music income final 12 months, rising 11% YoY.
SNEP additionally reported that there have been 11 million paying subscription accounts in France, up by +1.0 million YoY from 10 million in 2021. (These accounts have been shared by 16 million customers, through household plans and many others.)
This YoY progress within the variety of subscription accounts in France truly slowed in comparison with 2021, when the variety of paid subscription accounts grew by +1.3 million vs. 2020.
Music Enterprise Worldwide