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TikTok Deal with UnitedMasters a Game Changer for Artists, Content Creators

As China’s ByteDance faces increased pressure and scrutiny to surrender its stake in short-video app TikTok to Microsoft Corp. or another U.S. tech company, TikTok recently announced its first music distribution partnership with indie music distributor, UnitedMasters — run by CEO and founder Steve Stoute, a long-time record label executive credited for dozens of hits. The deal will reportedly allow independent music artists on TikTok to use the platform to make their music go public and distribute their songs directly to platforms such as Apple Music/iTunes, SoundCloud, YouTube and Spotify.

At a time when independent artists were already looking for ways to sidestep traditional record label deals and own more of a percentage, the deal will effectively allow young artists to use the social video app to gain fame and charting success.

TikTok has already proven the ability to thrust young entertainers into the spotlight, with acts like Lil Nas X and most notably gaining critical acclaim because of the platform. Meanwhile, artists like Curtis Roach, Curtis Waters, Breland, Tai Verdes, BMW Kenny and others have used TikTok to promote their music as well. Some even preview their music and host performances on the app.

Of course, the deal is contingent on world leaders banning use of the app but opportunists are seeing the move as a positive for the industry as a whole. UnitedMasters would take a 10% share of the revenue for music it distributes and allows artists to retain their rights — a huge sticking point with traditional record labels.

Meanwhile, UnitedMasters has helped launched the careers of artists such as Lil Tecca and Tobe Nwigwe. They also have some credibility in the corporate world with Stoute at the helm. Through partnerships with the NBA, Bose, AT&T, the NFL and others, they offer branding opportunities and royalty programs to help independent artists.

The partnership with TikTok allows UnitedMasters to foray into the social video space. TikTok will also add the music from UnitedMasters’ artists — pending approval — to its Commercial Music Library. This catalog gives verified businesses access to royalty-free music for use with their promotional content.

What’s great about this deal for TikTok users is that unlike with Spotify, the platform has a number of licensing deals with the major labels. Because it’s not a streaming service for music, nor a platform for watching official music videos, like YouTube and now, Facebook, it has short-term agreements with music labels. The deals give the video platform the right to use 30-second clips of the record labels’ songs instead of the full song.

While industry analysts expect Its shutdown to be devastating to the content-creator community in some areas, advanced users have been using virtual private networks (VPN) to access it in prohibited regions. This is similar to what Chinese users did with Instagram when it was banned in China. Without a VPN, experts anticipate that the app will be pulled Google and Apple Stores in the coming months.

This deal only gives independent artists and content creators the ability to circumvent government restrictions and music-label interference. The allure of fame, independence and wealth is too hard to pass up.

On August 14, President Trump officially signed an executive order requiring ByteDance to sell its TikTok’s American assets and any data gathered in the U.S. in 90 days. A recent bid was valued at $50-billion but it’s unclear what the company’s value is with this new deal with an American company in place.

For creators thinking about joining the platform to take advantage of the deal, it would certainly be the smart play. But don’t listen to us, let the stats tell the tale. The following are stats from Statista to demonstrate TikTok’s potential earning power and community:

  • 219 million first-time users uploaded the app in Q4 of 2019
  • $50.4 million was the total amount of global user spending in February 2020
  • TikTok’s U.S. users is expected to reach 45.4 million in 2020 — 21.9% year-over-year increase
  • Almost a quarter of online adults in the United States had come across videos posted on TikTok

While these numbers represent the U.S. alone, you can imagine what they will mean for content creators globally. The ability to tap into different markets is crucial not only to the new deal but also to the company.

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