This week, let’s focus on the various actions taken by the major labels. We’ll also see how TikTok is playing an increasingly important role for independent artists. Let’s see!
#1. Universal Music Group strengthens its presence in China
Universal Music Group (UMG) has partnered with Modern Sky, China’s largest independent music label, to strengthen its presence in the Chinese market and promote Chinese music globally.
Modern Sky, which represents a roster of 150 artists and sets up over 30 annual music festivals, including the renowned Strawberry Music Festival, will leverage UMG’s global distribution network. The collaboration also aims to connect UMG’s international artists with the rapidly growing Chinese audience, in a market that saw a 25.9% increase in 2023.
This move is part of UMG’s ongoing investment in China, which includes initiatives like Universal Music China Greater Bay Area and the distribution of content such as The Rap of China 2024.
#2. Warner Music Group: A Mixed Performance
Subscription streaming revenue grew by 5% year-over-year, reaching $645 million this quarter. However, this growth lags behind the 8% increase seen over the past 12 months. Ad-supported streaming revenue fell by 5% while publishing revenue from streaming declined by 4%, highlighting challenges in these areas. On a brighter note, physical sales, including vinyl and CDs, showed a slight increase and international recorded revenue rose by 9%.
WMG’s CEO remains optimistic about the potential of paid streaming, which he views as underdeveloped even in mature markets. He outlined strategies such as raising wholesale prices, reducing discounts, and targeting superfans to drive growth. Despite this optimistic outlook, WMG’s stock fell by more than 9%, reflecting investor concerns about the company's uneven performance.
#3. TikTok Launches Masterclasses for Songwriters
TikTok is expanding its #BehindTheSong initiative, first launched in 2023, by introducing livestream masterclasses for songwriters. The first event, scheduled for November 27, will feature Grammy-nominated songwriter RuthAnne, who will share her songwriting secrets, tips for creating hit songs, and advice for navigating the music industry.
A second livestream, hosted in collaboration with PRS for Music on December 11, will provide an in-depth explanation of how songwriter royalties work.
These initiatives were announced during a TikTok event in London, held in partnership with PRS for Music and The Ivors Academy. They highlight the growing recognition of songwriters' contributions. According to TikTok’s head of music, Ole Obermann, “Songs generate the same level of excitement and interest as recordings.”
#4. Amazon Music Collaborates with Audible to Compete with Spotify
Amazon Music has launched a new service that includes access to one audiobook per month for subscribers to its Premium plan, in partnership with Audible. This initiative aims to compete with Spotify, which added 15 hours of audiobooks to its Premium subscriptions in March, a move that sparked significant controversy in the music industry.
Unlike Spotify, Amazon Music has worked with the music publishing industry to ensure that this offering does not reduce royalties for songwriters, according to NMPA President David Israelite. Spotify, on the other hand, is facing a lawsuit from The MLC for allegedly reducing mechanical royalties paid to music creators by reclassifying its subscriptions as "bundles."
This strategy highlights the growing rivalry between the two giants for dominance in the audio market, while also emphasizing the financial and regulatory challenges surrounding creator royalties.
#5. TikTok's SoundOn Battles the Labels in the Charts
In recent weeks, discussions about the battle between TikTok and independent labels have been fueled by the expiration of its licensing deal with Merlin. However, another, quieter competition is unfolding on global charts: TikTok’s SoundOn service versus the established music industry.
Launched in 2022, SoundOn has quickly become a key player with notable successes, including tracks that have reached the top of Spotify's global charts. The service has also supported artists and collaborated on major projects in the UK.
TikTok is increasingly resembling a full-fledged record label, with signs of a larger strategy to capture a bigger share of the market. This shift could lead to investments in independent artists, altering the balance between the platform and major labels. As a result, SoundOn is redefining the dynamics of the music industry, raising questions about the future role of major labels in this new ecosystem.
