Social media apps such as TikTok were behind a 28% increase in time spent listening to music, to about 19 hours per week, in the first half of 2022, according to MusicWatch.
The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online.
In the first part of the year, the U.S. had 10 million more music streamers than a year ago — and 20 million more than two years ago. From April to June, 73% of U.S. internet users 13 and older streamed music.But can TikTok co-exist with traditional music streaming platforms? Crupnick believes it can. He hasn’t seen signs that TikTok listening is cannibalizing time spent on other music streaming platforms. “We’re seeing them as being somewhat harmonious,” he says.
How TikTok interacts with music streaming platforms like Spotify, Apple Music and YouTube carries large financial implications. That’s because not much money is made directly from TikTok — yet. If TikTok crowds out time on subscription services, fewer people might choose to pay for subscriptions. Even if TikTok replaces time spent using ad-supported streaming services such as Spotify and YouTube, the record industry would get less value in return.
Replacing mature, well-monetized subscription listening with younger, poorly monetized social media viewing would be a net loss for labels and artists. Subscription services are record labels’ largest breadwinner, accounting for $4.5 billion of the record industry’s $7.7 billion of total revenue in the first half of 2022, according to the RIAA. Streaming in its various forms — subscription, ad-supported, limited tier and more — represented $6.5 billion.
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