If you use TikTok, you have the choice between two different types of accounts: you can either have a personal or creator account, or you can use a business account. But what exactly are the differences, and what are the pros and cons of each from a musician’s perspective?

Relatively small differences

Let’s start with the similarities between the two account types. They are both free and offer the option to run ads. You can also get verified on both. But there are a few smaller differences when it comes to the analytics: the creator account will only let you access them via the app, while on the business account you can download them, as well. Another minor difference is the privacy settings: a creator account can be set to private, while a business account is always public.

Creators can use any sound

One pretty substantial difference can be found in the use of sounds. Business accounts can only use “commercial sounds,” meaning those that have been cleared for commercial use, while with a creator account, you have access to the whole library with millions of songs.

As a creator, you additionally have access to specific programs such as Creator Next or the Creator Fund that are not open to business accounts. However, both accounts can use the Creator Marketplace where companies and creators are supposed to find each other.

Musicians are creators

Most creator accounts don’t have the option to put a link in the bio. Those who additionally like to use external platforms to plan and analyze their content also have to switch over to business. Lastly, there are current limitations for creator accounts when it comes to shopping features, as well.

So, you have a few small restrictions if you’ve got a personal account. But when it comes down to it, a creator account is clearly better suited for normal TikTok users, content creators, and public persons – which includes musicians. If nothing else, this is simply because with a business account you will have massive restrictions in your music selection. But since you can switch between your personal and business account with just one click, you can also easily try out both.

At the moment, short videos are probably the best tool to generate reach. However, they’re less suitable for making actual profit. That’s why many of the creators don’t earn their money on these platforms themselves. Proper monetization has so far been missing from TikTok, YouTube Shorts, and Instagram Reels. But now, YouTube has decided to take the lead, sharing their ad revenues with creators starting in the coming year.

Earning money through the YouTube Partner Program

What we currently know is that Shorts will become a part of the YouTube Partner Program in 2023. Additionally, YouTube has communicated that the split will be 55/45, as is the norm. However, with Shorts, the creators will not be receiving the usual 55% but instead only the 45%. These are taken from the generated ad revenues after the rights owners have been paid. So, as a musician, you can make money in two ways, as a rights owner of the used music and through the reach generated with the Shorts.

The criteria

Since YouTube Shorts obviously won’t be putting an ad before every single video, the payout follows a pro-rata system that works similarly to the one used by the streaming services. However, how exactly these ad revenues are distributed has not yet been communicated.

But it wouldn’t be YouTube if everyone was able to profit here. Of course, there are some numbers that you have to reach, and YouTube is pretty clear on them: 1,000 subscribers and 10 million Short views in the last 90 days. Only then can you profit from the benefits the YouTube Partner Program offers. But despite these restrictions, this is still an important step, and we can only hope that the competition will soon follow suit.

YouTube is catching up to Spotify

As we have often mentioned before, YouTube wants to become the number one income generator for the music industry. Between July 2021 and June 2022, YouTube paid 6 billion dollars to the music industry. In the 12 months prior, it was 4 billion, so we’re talking about a growth of 50%. For 2021, Spotify reported payouts in the amount of 7 billion dollars and a growth of 40% compared to 2020. Even though the two big players use different accounting periods, it’s clear that YouTube is inching closer to Spotify, one step at a time. Another important factor for the payouts is the UGC (User-Generated-Content), which is based on the Content ID. This makes up 30% of the 6 billion we mentioned.

To put it simply, many social media platforms work as follows: At the beginning, the number of users mingling on the network is pretty manageable, so you can build up decent reach pretty quickly. The more users join, the harder this becomes, until there comes a point where it’s near impossible to reach a lot of them without implementing ads or influencers. Since TikTok has experienced enormous growth, one could assume that you can’t go viral there without help anymore. But in fact, it seems to actually still be possible.

Two thirds go viral with organic posts

A study by the agency ContraBrand has shown this. They analyzed songs from 208 artists, 56% of which are not under contract with a record label. These tracks reached the top 200 of the TikTok Charts in the first six months of 2022 and have subsequently generated more than one million streams on Spotify. 63.8%, meaning almost two thirds, made it without paid ads or influencers. Only 9.1% used the help of influencers, while ads were only at play in 2.5% of cases.

In principle, these are very good news for artists, as it is frustrating not to be able to reach even your own followers without having to pay. But most of the time, this kind of success didn’t come overnight. On average, the artists in question had been active on TikTok for a year and a half before they went viral.

Going viral is not a strategy

But this also begs the question of whether that viral moment should be the only goal or whether you would rather work towards constant performance. To achieve this, using ads from time to time is certainly recommended, especially when it comes to key moments such as album campaigns. As we have already mentioned, going viral is an occurrence, not a strategy. However, by using ads or influencers in a purposeful manner as well as having regular posts, you can put together a strategy for long-term success on TikTok.

TikTok’s miserable pay

But what a viral song or even the best strategy can change is that TikTok pays musicians miserably. While Spotify, YouTube, and Meta regularly receive harsh and justified critique, these voices have been surprisingly quiet when it comes to TikTok. Let’s take a look at the numbers: Estimates assume that TikTok paid 179 million to music rights owners in 2021. By comparison, YouTube distributed a whopping 6 billion between July 2021 and June 2022.

TikTok would need to pay at least four times as much as they do now

Now, of course, YouTube has 2.5 billion monthly users compared to the slightly more than one billion users on TikTok. YouTube’s ad revenue was as high as 28.8 billion while TikTok made 12 billion. So, in both cases, TikTok’s numbers are equivalent to 40% of YouTube’s numbers. However, 40% of 6 billion would actually be 2.4 billion, not 179 million. YouTube therefore pays the music industry 13 times the amount TikTok does.

But since we’re sort of comparing apples to oranges here, let’s take a look at the revenues made from user-generated content. In the time period we’ve mentioned, YouTube made 2 billion in this area. 40% of that, however, are still 800 million and thus around 4.5 times the amount TikTok paid.

Payouts must be remediated ASAP

It almost seems like the music industry has given TikTok a free pass to feather their own nest at the expense of musicians. This must be made right as soon as possible before TikTok grows too powerful once and for all. The industry has already made similar mistakes when it gave music videos to MTV for free or when Apple made a fortune with iPods chock-full of illegally downloaded music.

We all know, as a musician, there’s pretty much never enough money around. The budget’s somehow always too small and you gotta save as much as you can to make ends meet. Even more so when there’s a pandemic throwing a wrench into the works. Meanwhile, we also know the truism that you have to invest money to make money. As a musician, you therefore have to really think about where you can save money and where doing so may even be counterproductive.

The music

No matter how talented you are, if the sound quality isn’t right, many won’t be able to recognize it. But renting a studio is expensive, and it is therefore worth it to consider investing in a home studio to save on studio costs long-term. Plus, you’ll be able to get started right away as soon as a new idea pops into your head. Mix and mastering are another area you shouldn’t skimp on, but definitely compare prices and performance levels. At the end of the day, your music should reach your fans with the best possible sound.

Your image

Just as important as your music, and some would say even more important, is your image or your brand. For the most part, this just requires time to find out how you want to present yourself to the public, what makes you unique and represents you as an artist. Once you have it figured out, you’ll need to broadcast this image through every channel at your disposal. Things that are really worth spending some money on are photos, graphics, and videos. The right press photos for the media and social media as well as eye-catching cover photos for your releases can make you stand out from the competition.

Marketing

Another truism is that even the most amazing music won’t do any good if nobody ever hears it. So, it’s pretty much impossible to reach new listeners without investing in marketing. Here, too, it’s important to compare and do some research, and steer clear of dubious offers. Of course, you can also run all the ads yourself, but to do that, you should at least have some basic know-how. Our team at iGroove will happily advise you on your marketing strategy, tailored to your budget.

Your team

Very few make it in the music industry as a lone wolf. Behind every big artist is therefore a strong team. So, if you believe you’ve found the right people, don’t be a penny pincher. Share your revenues with them. At the end of the day, your team will ensure that your income multiplies, and so there will be more for you later even if you give up a share now.

Education

Fortunately, this part also mainly just costs time. Especially if as an artist you do a lot things yourself, you are also the one responsible for staying updated on the changes and trends in the music industry. So, you should always make a little time to read up on things, watch tutorials, or listen to podcasts. With iGroove Magazine, we try to put together the most important developments for you, so you can save some time here.

Understandably, it can be quite daunting to invest when you don’t have planning certainty. We at iGroove try our best to counter this. For your short-term plans, we show you how high your next three payouts are likely to be. For the long term, you can see how much you will make in the next 6, 12, and 24 months. Once you reach a certain level, you can additionally request an advancement. You can thus make the necessary investments with a lot more peace of mind.

A little over a year ago, we showed you how Instagram’s algorithm works. We’re really speaking of multiple algorithms, to be precise, and one of them is responsible for the popular TikTok clone known as Instagram Reels. Today, we want to go deeper into it and show you how you can send positive signals to this algorithm and thus increase the chances of your videos being shown to as many people as possible.

Reach new fans using Reels

The algorithm is obviously responsible for deciding who sees the Reels and who doesn’t. While in the Feed you will see Reels from people you follow, the Reels and Explore tab will show content from users that you don’t follow. That’s the place where you get a chance to reach new people. And that’s exactly the purpose for which Reels should primarily be used, to entertain and to win potential new fans. With Stories and Feed Posts, on the other hand, you are primarily addressing your existing followers.

So, let us now show you the criteria by which the algorithm decides which Reels are shown and which are not.

Relevance

The algorithm notes what content users watch and like and then tries to use Reels to suggest similar content. The content of a Reel will be assessed based on the hashtags used but also on an analysis of the video and the sounds used.

Topicality

Short videos are often also short-lived. Because of that, the algorithm prefers new Reels as much as possible. This, in turn, means that creators have to regularly deliver new content.

Interactions

The algorithm analyzes both the way in which users interact with the content as well as how they interact with other users. You don’t even have to necessarily follow someone in order for interactions to occur that the algorithm will pick up on.

Popularity

If you already have an engaged follower base and regularly get lots of likes, shares, etc., the chances of your Reels being shown to more people will also increase. The chances that you go viral without some previous reach, is lower here than it is on TikTok.

So, to sum up, one could say that entertainment value, topicality, and relevance are most rewarded.

Content for the algorithm

Here are some things you should keep in mind to stimulate the algorithm:

• As we’ve said, the algorithms conducts an image analysis. You should therefore make sure you have good video quality. On top of that, the algorithm likes seeing Instagram’s effects and filters being used in the content.
• Even though Reels are a copy of TikTok, you shouldn’t just repost your TikTok videos. The algorithm will spot this immediately due to the watermark and will show the clips significantly less.
• As previously mentioned, the right hashtags will help the Reels be shown to an interested audience. Up to 30 hashtags are possible, but only 3-5 are recommended.
• The algorithm likes it when you use audio that is currently trending. So, for musicians, it may be worth using songs that are not your own from time to time.
• Again, interactions are vital, so you shouldn’t focus on Reels alone, but also on other features on Insta such as Feed posts and Stories.
• As always, it is worth keeping an eye on the analytics to find out which type of posts are especially well-received and what time is best to reach as the most people with your Reels.

Artists will often speak of their fans or their fanbase as if they were one homogenous group. But this only applies to the rarest cases, and the more fans you have, the less likely it does. Your fans differ in many aspects: age, gender, interests, income, buying behavior, place of origin, and so on. That’s why it’s well worth delving into this data and figuring out: Who even are my fans?

Targeted marketing

Of course, you would be doing this out of tangible self-interest, as well. Only if you actually know your fans will you also know what you can sell to them, which channels to use, and with which content you can do this. This way, you can put your marketing budget, which is always too small anyway, to much more targeted use than if you were working with wrong assumptions. But before you can start analyzing your fanbase, you have to first make a clear distinction between the real fans and the rest. Not every follower on social media or every listener on Spotify is automatically a fan (yet).

Fan data is only a few clicks away

While in the past, you could really only know very little about your fans, things have become much easier in the age of data capitalism. With manageable effort, you can actually find out quite a bit, ranging from demographic data (age, place of origin, gender, marital status, income, education, etc.) all the way to buying behavior and even more personal characteristics such as values, hobbies, and other interests. Once you have gathered the info, you can much better judge how you can reach these fans, even though, admittedly, you will have to work with certain stereotypes for specific population groups.

But how do you even get this info? Well, a good portion of it can be accessed anytime directly on your phone:

• The insights of your social media channels
• The insights of the DSPs (Spotify for Artists, Apple Music for Artists, etc.)
• The insights of your music distributor
• Google Analytics
• Pixel (Facebook, Twitter, TikTok)
• Other tools such as Chartmetric

Basically, every tool you use to make contact with your fans will tell you something about them. It can also be the program with which you send your newsletter, your website, or your webshop.

Just ask your fans

Using these tools, you obviously primarily get your fans’ demographic data. To find out a little more about their inner life and buying behavior, it’s well worth studying the comments under your posts and even taking a few notes, if necessary. To really dive in deep, we recommend selecting a specific group within your fanbase for a survey. Ideally, it would be coupled with a contest or giveaway, or you could even ask people one-on-one, which can be easily disguised as a meet & greet.

Data is better than just gut feeling

The more you discover about your fans, the more you know what content they want to see on social media, what merch products will land and at which price, where it would be worth playing live, and so on. The fanbase can thus be categorized in various subgroups that you can work using specific campaigns. If you want, you can even orient your music towards that. And even if the last point probably overshoots the mark, it is still worth it to analyze the data from time to time instead of relying solely on your gut feeling.

The streaming market is mature. Spotify is the uncontested number 1, while the other tech giants fall in line behind them with the likes of Apple Music, Amazon Music, and YouTube Music. So, it will be hard to pass both Spotify as well as some of the most powerful companies in the world (Apple, Amazon, Google) and pose any serious competition to them. That is, unless the most important social media platform out there at the moment, which has enormous influence on the music industry already, launches its own streaming service. Which is exactly what TikTok seems to be planning.

TikTok has long been involved in the music business

We don’t even have to discuss the impact TikTok can have on someone’s music career. But what may not be as publicly known is that TikTok already has its own music distribution platform (SoundOn) and is already getting in on in the streaming business, as well. However, Qishui Yinyue is only available in China, whereas Resso’s accessibility is currently limited to India, Brazil, and Indonesia. But while they are only serving four markets at the moment, all of them are among the top six most populated countries in the world and make up 42% of the global population.

Is TikTok Music coming to Western markets?

It seems that TikTok has set their sights on the other half of the world population, as well. Both in the U.S. and in Australia, they have now filed trademark applications for TikTok Music. Media outlets have discovered that they are already recruiting people for TikTok Music, as well. ByteDance has not yet made any statement on these plans, but quite a few things are pointing towards their intentions of tackling the western market. So far, TikTok trends have been reflected with little delay on the streaming portals. In the future, everything could be happening exclusively within the TikTok universe without users having to resort to other platforms.

TikTok Music could stand out from the competition

What’s clear is that TikTok can’t reinvent streaming completely, because user habits are already too well-established by now. They also can’t score with the music, since pretty much all streaming services have more or less the same songs in their repertoire. And yet, there are quite a few points with which TikTok could stand out from the competition:

• Social elements: What’s lacking in most western streaming services are social elements, such as being able to comment on songs. Here, TikTok could become the perfect link between music streaming and social media.
• Better recommendations: In order to suggest just the right music to their users, streaming services need data. Here, TikTok could have an advantage as well, at least over Spotify, since they can access data both from their video platform as well as their streaming service. And they’ve already proven that their algorithms are better than the competition.
• Better playlists: A big share of current online trends originate from TikTok. Since they have access to this information before everyone else, they could translate it into playlists that reflect these trends well before the competition even catches a whiff of them.
• Podcasts: Resso is already engaged in the podcast scene, so we can assume that this will be the case with TikTok Music, as well. Here, numerous opportunities would open up for podcasters having access to a combination of audio and video.
• Onboarding: Obviously, with their more than one billion users, TikTok would also have an edge when it comes to winning new customers. If someone wants to listen to a song that they liked on TikTok in full, they can be directed straight to TikTok Music.

If anyone can do it, it’s TikTok

Of course, becoming serious competition to the established players won’t be a walk in the park, even for TikTok. But if there’s anyone who can take on the current market dominators, it probably is just them at the moment.

For now, though, let’s wait and see if TikTok Music does actually launch, and if so, in what markets and with what features. The fact is, if it comes to that, with TikTok, SoundOn, and TikTok Music, they will have created their own, powerful music ecosystem.

Discovering products on social media or on streaming services and then purchasing them without much hassle is increasingly becoming the standard these days. YouTube, too, wants to give their creators more shopping opportunities and is therefore collaborating, as TikTok and Spotify has recently done before, with e-commerce giant Shopify. This is obviously opening new opportunities for musicians, as well.

Directly integrate products

With this collaboration, creators now have the option to connect their Shopify store with their YouTube channel and integrate products under their videos, during livestreams, or at the end of their videos.

However, as is pretty much always the case on YouTube, not everyone has access to the feature. However, musicians don’t need a minimum number of subscribers as long as they have an official artist channel, which we recommend in general.

More shopping features on the way

Additionally, YouTube is testing a separate shopping section in the “Discover” tab, although for the present, only in the US, Brazil, and India. However, it is set to have additional markets added within the year.

The plan seems to be to expand these shopping features further for longer videos, livestreams, as well as the popular Shorts.

Ad revenue increase less than expected

YouTube has additionally released the ad revenues of the 2^nd quarter of 2022. These reached 7.34 billion dollars, a growth of 4.8% compared to the previous year. However, they are still well under the 7% growth that analysts projected, which also means the lowest growth rate in two years. What portion of that will go towards the music industry is yet to be known.

Spotify wants to achieve one billion monthly users, and with that goal, the company naturally can never stand still. We’ve summarized everything that has happened in the past few weeks for you.

Let’s start with the numbers from the 2^nd quarter of 2022. Spotify has now reached 433 million monthly active users (19% more than in the previous year) and 188 million premium subscribers (+14%). The revenues were as high as 2.86 billion euros (+23%). The ad revenues made up 13% of those, which is a new high. However, all in all, they still recorded a 194 million dollar loss.

Video podcasts

In total, there are now 4.4 million podcasts on Spotify. A year ago, it was only 2.9 million and in 2020, 1.5 million. The number video podcasts on Spotify is unknown, but it will grow significantly in the coming months. Up until recently, only creators from the US, Canada, UK, Australia, and New Zealand were able to make video podcasts, but now, this feature has been expanded to six additional countries, namely Germany, France, Italy, Spain, Brazil, and Mexico.

New live event feed

To better alert users to concerts in their area, Spotify has launched a new Live Events Feed. According to Spotify, this is just the first step to shining the spotlight on events.

So, it’s yet another reason to make sure you list your concerts on Spotify, as well.

Spotify buys Heardle

Spotify has acquired the popular music game Heardle, which currently remains free and in the long-term, will be completely integrated into Spotify. Similar to Netflix, Spotify seems to test out how games will fare with their range of services. Our friends at MIDiA are seeing it as an attempt to reach Gen Z users, more than anything, which Spotify is doing a rather rough job of.

Recently, we posted an article showing how many artists would profit from a switch to the user-centric model and how big the influence of the super fans would be. But we also doubted that the major labels would be open to switching their system since their own artists would hardly profit from it. Now, however, Warner Music Group has reached an agreement with SoundCloud to test out the user-centric model, or fan-powered royalties, as they call it.

Up until now, fan-powered royalties were only available to DIY artists who upload their music directly via SoundCloud. So, it’s a major win that they were able to convince one of the three major labels to join in the experiment. We’re crossing our fingers already that this data can be analyzed in just as much detail as those of the DIY artists.

Experiment without risks for Warner

The fact that Warner is agreeing to this experiment, which may well result in financial losses for their own artists, can be traced back to two main reasons. One of them is Eliah Seton, who used to be a Warner bigwig and who is now the president of SoundCloud. The other is the reality that while SoundCloud is an important platform, it is not one of the top streaming services, which means that a slight decrease in revenues would still be bearable. Another possibility is that they negotiated a minimum guarantee that was not communicated to the public.

The other majors won’t follow suit

The fact that the smallest of the three major labels is starting this experiment is definitely a step in the right direction. But in order for the user-centric system to really take hold across the industry, the leading streaming services, the other two major labels, as well additional rights holders must pull their weight, as well. The chances that Sony Music or much less Universal Music will be ready for this step, are slim.

While Warner Music does have a few top superstars in their ranks, four out of the top 5 artists on Spotify are under contract with Universal, whose roster is filled with many more global superstars likely to rake in less money with the user-centric model. Additionally, Universal is a big player in the hip hop scene, and according to a French study, hip hop would be the genre to record the biggest losses with the user-centric model.

Agreement among all market participants hardly possible

The probability that Universal will ever support a system change is extremely low. So, really, there would need to be such a consensus among all the other parties involved that Universal would practically be forced to give their approval. This, too, seems highly unlikely at the moment. The big players continue to have more pull and, sooner or later, can probably inhibit the switch to a significantly fairer and more transparent system.

Is this really the dead coming back to life? CD sales reached their peak in 2004, and ever since then, fueled by piracy, downloads, and finally streaming, it’s been continuously going downhill. But now, there is a change of trend on the horizon: last year, for the first time since, the US saw an increase in CD sales reaching 46.6 million compared to the 31.6 million in 2020. That is a massive rise of 47%. Revenues, too, grew from 438.2 million dollars to 584.2 million.

Support of favorite artists

And these are just the CDs sold via the official channels. However, many fans also purchased a significant portion via web shops or directly at the concerts. So, is the CD making a comeback just as vinyl has before? And if so, why? There are several reasons: For many fans, CDs (and vinyl) are a souvenir just like a t-shirt can be. Many don’t even listen to them and continue to stream the music instead, but they still want to support the artist in additional ways.

From the perspective of the artists, CDs are much cheaper to produce than vinyl, and on top of that, they don’t come with as many supply bottlenecks as the black gold does. Correspondingly, CDs are cheaper than vinyl for the consumers, as well.

Some audiophile fans will prefer CDs and especially vinyl for their sound quality.

CDs and vinyl will not disappear

Of course, the days where CDs generated billions in profits won’t be coming back. But depending on the fanbase, it may be a good investment for many artists to have some CDs in their product line next to their other merch. It’s becoming apparent that CDs and vinyl won’t disappear into obscurity but instead will remain as a collector’s items. And this may well prove to be a nice additional source of income for musicians.

In the music world at the moment, everything seems to be revolving around TikTok. Because of this reality, some labels go as far as refusing to release songs that have not gone viral yet. Of course, there are many reasons why you should focus on TikTok. But in the midst of the big hype, you shouldn’t forget to think outside the box from time to time, as TikTok is by no means the only platform that can get you enormous reach. To put in in more concrete terms, this is possible with YouTube, and specifically with YouTube Shorts, as well.

Shorts: Successful TikTok copy

YouTube Shorts is obviously a straight-up TikTok clone, as the biggest video platform, too, is feeling the pressure from TikTok. Since July 2021, Shorts are available everywhere you can access YouTube, and on the occasion of this anniversary, YouTube has shared some of their statistics. These show that the clone has definitely worked. Shorts have generated 30 billion views everyday and 1.5 billion logged-in users are watching Shorts every month. That is 75% of their 2 billion users.

Positive impact on watchtime and subscribers

But almost even more important than these impressive statistics are the following facts: According to YouTube, creators who post Shorts as well as longer videos profit from longer watch time and stronger subscriber growth than those who only post longer videos. So really, this means that Shorts have a positive impact on the number of views of the longer uploads, as well.

YouTube states that they not only want to be the biggest source of income for the music industry but also the place where the connection between the artist and the fans can be strengthened. Shorts are thus supposed to be a gateway leading fans to music videos, interviews, or livestreams. YouTube’s goal is for the discovery of music on YouTube to directly lead to ticket and merch sales and to help with building a fanbase. Pretty lofty goals for sure, and Shorts are clearly meant to play an important role in achieving them.

Shorts as part of the strategy

As we have often mentioned before, you shouldn’t just view YouTube as a place to store your music videos. Instead, try to use all possible features the platform provides. Part of this would be coming up with a strategy consisting of the right combination between Shorts and longer videos. However, you should of course always think about whether or not you have the capacity to post on TikTok, Instagram, and now Shorts on top of it all. Because posting the exact same content everywhere is not gonna get you anywhere. You need a different strategy for each platform.

More features on the way

Sooner or later, YouTube will introduce other tools meant to offer additional sources of income for artists. YouTube is planning a Live Shopping feature and will also integrate NFTs into the platform, though the format remains to be seen. Shorts, too, will receive new features in the shopping area, as well as tipping features such as Super Chat.