Editorial: Is TikTok Toast?

By Dawoud Kringle

In February 2020. I wrote a piece about TikTok. The gist of the article described TikTok‘s corporate structure as a subsidiary of ByteDance, how its marketed exclusively outside of the People’s Republic of China (by mandate of the CCP), its enormous financial success, and how it affects professional musicians.

Their success is collapsing.

There was controversy regarding TikTok’s alleged spreading of misinformation about COVID-19. Recently, Microsoft, after having purchased LinkedIn, GitHub, and Mojang AB, made an attempt to acquire TikTok, and failed. TikTok has instead chosen to partner with Oracle. The reactions in the financial world were mixed, but it’s obvious that no company would sell a successful company or partner with another corporation unless the move profited them and their position. Or if the company’s days are numbered.

ByteDance is forced to operate in accordance with the laws of the People’s Republic of China. This is already a red flag (no pun intended). It is becoming common knowledge that the TikTok app collects data from users even outside the app. ByteDance is required by law to share this information with the Chinese Communist Party. And consider the fact that their connection with the communist party is a sign of failure.

Communism does not work, and as an economic system it is absolutely unsustainable. The Soviet Union and North Korea learned this the hard way. The Chinese avoided the same fate by keeping its political communist structure, but adapting an authoritarian capitalist economic model (which is doubtless making Mao Zedong spin in his grave fast enough to generate electricity while he awaits eternity in hell). Ultimately, China failed to learn the lessons from the Great Leap Forward and the Cultural Revolution: mainly that communism is its own built-in self-destruct mechanism, and that neither human nature nor objective reality can be changed through the application of political ideology.

Looking at TikTok objectively and in retrospect, it’s obvious that the platform was never meant to last. Like any flash-in-the-pan, its success proved unsustainable.

Consider how TikTok was, for a short period, the means by which major record labels would seek new talent. If an artist showed success on the platform, the labels would step in and offer a deal.

This actually gave the artists considerable leverage. The royalty terms of the deals were actually tipped in the artist’s favor. Before this, musicians rarely got more than 10-15% royalties. But now, according to some sources, TikTok stars were being offered 50/50 deals (sometimes adding rights to master recordings to revert to the musician at a future date). The record labels had no choice.

Now, it’s important to note that download and user agreement numbers started dropping. In the 3rd quarter of 2020, TikTok downloads dropped by 1.2 million. Between 2020 and 2022, music streams dropped from 4.9 billion to 1.9 billion. And engagement statistics fell from an average of 45 minutes daily to 37 minutes.

This is a big problem for record companies. The era of generating a hit through a handful of influencers posted it is over. The labels are stuck between a rock and a hard place. It costs more for them to sign the TikTok stars, and at the same time, the music is generating less income.

Recently, a singer named Nicky Youre had a TikTok hit called “Sunroof.” Spotify statistics show, however, that demand for his other songs dropped by 99%. The very model seems to be set up in such a way to generate one-hit-wonders that generate little to no real profit or long-term income for anyone.

TikTok and the labels that work using it as a means of finding talent operate in a haphazard manner. They are fighting in a constantly saturated market. This is unlike movie studios who carefully plan a movie release so as not to conflict with any possible competition. Of course the nature of social media is that its content is produced by people who do not operate in the same way as a media company should approach its marketing. The labels, however, followed the content creators “throw-it-against-the-wall-and-see-if-it-sticks” approach to music promotion. It is clearly an act of desperation.

And it’s obvious that not only is the novelty of TikTok wearing off, so is its usefulness to professional musicians. The number of TikTok music hits are dwindling, and there are only so many videos of people playing and singing into their mobile devices against a backdrop of their bedrooms that can generate the kind of interest an artist needs.

Nowhere is this more obvious than the three most popular videos of 2022: a man making a chocolate sculpture of a giraffe, a young woman chewing gum in different costumes and settings, and a chipmunk named Squishy eating a peanut.

The worst part of this downward trend is that the record labels seem to have no backup plan. They painted themselves into a corner with no way out.

It would be interesting to see what arises to – or if anything can – fill the inevitable vacuum of TikTok’s demise. Frankly, I have no faith in the record company executives in coming up with a solution. Their narcissistic capitalist method of problem solving is just as demented as the Chinese communists they have been in bed with.