On January 1st, 2021, a new blanket licensing system was established by the Music Modernization Act. This system, facilitated by the Mechanical Licensing Collective, is one of many steps in the ongoing battle to distribute royalties to their rightful copyright owners across the globe. Historically, songwriters and musicians received mechanical royalties every time their song was recorded, reproduced, or physically sold. This system of intellectual property has been streamlined globally through the WTO’s Trade-Related Aspects of Intellectual Property Rights agreement (TRIPS), and initiatives in Europe to increase patent and copyright protections. These systems worked relatively well for physical and digitally-downloaded music, but allocating royalties has become much more complex as streaming, subscription-based, and ad-based platforms for music gain popularity.
When artists lose control of their creative property and are not justly compensated for their work, a “value-gap” is created, which disincentives the artistic process of making music. The expansion of this value-gap threatens the livelihood of musicians, and some artists may attempt to keep their music from crossing international boundaries to maintain control of their legal rights or stop making music altogether. The struggle to identify musical works and match them with their owners has been present internationally since we first began to write music, but the issue becomes even more complicated by today’s platforms such as TikTok, which post and re-post music without artist permission and transmit the sound to listeners all around the world.
TikTok, which launched in 2016 in China and 2017 internationally, has grown exponentially over the past several years. With 693 million downloads in 2019 and 650 million in 2020, the app is expected to reach 1.7 billion monthly active users by the end of 2022. In 2021, for the first year ever, TikTok revenue was included in the U.S. Recorded Music Revenues report, and it was found to be contributing to a 24% increase in revenue from music. Internationally, TikTok generated nearly $4 billion dollars in revenue in 2021. TikTok is growing quickly and could transform the spread of music globally, however, it is unclear how much of this rapidly shared music will be attributed to its rightful owners, and if it is attributed, whether those artists will be compensated.
Daniel Lawrence, writing for the Vanderbilt Journal of Transnational Law, associates the recent rapid expansion of the value gap in music with streaming on the video platform YouTube. One of the aspects of YouTube that Lawrence identifies as particularly linked to the value gap is the video-recommendation system YouTube uses. This system, or algorithm, uses data-mining to recommend content that you are interested in after your video is over. TikTok, similarly, has built its success through its “For You Page”, which uses an even stronger algorithm to keep recommendations relevant, and keep you watching for longer. Both platforms exist as “ad-supported” platforms, which allows them to fit into copyright safe-harbor provisions in various countries.
TikTok only recently integrated artist royalties for plays of music through a new feature called SoundOn, and previously relied exclusively on user-uploads with no requirement for artist credit. Artists can utilize the new feature to get ahead of the copyright issues and upload their own work, which would earn them royalties per play, however, there is no way to ensure that their upload will be the most viral “sound,”, and an infringing copy can just as easily rise to popularity – re-creating the fair-use and safe harbor issues presented previously. A 2021 study showed that of all the sounds uploaded to TikTok, 33% were misattributed to an incorrect author. The study also identified the three most common misattribution practices on TikTok, which are reuploading, appropriating, and renaming sounds. This puts TikTok further behind the ball of crediting artists than YouTube. The similarities between these two platforms illustrate how TikTok can pose an equal or even greater threat to musicians, and how current legislation is inadequate to protect artists as their work spreads online.
Copyright Protection Globally
There have been attempts to help artists maintain control over their work in the U.S., such as the Digital Millennium Copyright Act enacted in 1998. However, as many artists co-signed in their 2016 petition, the “DMCA” framework is no longer adequate to provide protection in the age of streaming. The 2016 petition was triggered by frustrations with YouTube, but many of the complaints are exasperated by the TikTok platform. DMCA “added section 512 to the U.S. Copyright Act, which implements liability shielding safe harbors for online service providers that store information posted by users”. The original goal of this provision was to help foster the growth of the internet services, but the actual use has evolved over time.
The modern issue posed by DMCA is that the companies that take advantage of the Act’s safe harbor provisions (YouTube, TikTok) did not exist when it was drafted in 1998, and the drafters could not have imagined what the internet looks like now in terms of music-sharing. The result of this is that while the user experience of finding music through YouTube or TikTok (ad-based) vs. Spotify or Apple Music (subscription-based) may be equally appealing, the revenue returned to artists on platforms like YouTube and TikTok is miniscule compared to Spotify or Apple Music, because the ad-supported platforms “are not required to obtain a license to host user-uploaded content” under the DMCA safe harbor.
A leading case in the U.S., Viacom International Inc v. Youtube, established that these platforms are not liable to artists as long as they can meet three requirements: 1) they cannot have actual knowledge that infringement is occurring, 2) they must not receive a financial benefit directly attributable to the infringing activity when they have a degree of control over that activity, and 3) they must act expeditiously to remove content if they discover infringement. The real-life result of this has been the “notice and takedown” process on YouTube, which leaves room for the infringer to counter-respond, slow the takedown process down, or just re-upload the infringing work. Tremendous amounts of infringing music on YouTube remains unattributed to the artists who created the work.
On TikTok, the platform relies on the fact that their videos mostly fall under “fair use” to argue that they do not have to actively seek out copyright issues on their site, and will only respond to copyright infringement reports directly from copyright owners, their attorneys or agencies. Ad-based platforms such as TikTok do not fit squarely into the DMCA’s framework, which leads to an undesirable result of infringing music spreading wildly on the app without artist control or knowledge. In sum, the spread of music on TikTok can lead to missed royalties, inaccurate artist attribution, and unchecked infringement in the U.S market.
China, India, Japan, Malaysia, Mongolia, Taiwan, South Korea, Hong Kong, and Singapore have implemented notice and takedown procedures that function a lot like the DMCA laws in the US. While the laws vary by country, most of them mirror the three requirements outlined in section 512 of DMCA regarding notice and knowledge of infringement. China faces the additional challenge of controlling a music market with a prevalence of piracy, which accelerates itstheir value gap substantially. Lawrence theorizes that the country’s history of piracy has influenced Chinese streaming services to ignore legitimate takedown notices in favor of leaving infringing content up. However, China has recently cracked down significantly on domestic piracy, which has been encouraging for the state of creative content in the country.
Recent research indicates that TikTok is advancing the music-discovery process throughout the Asia Pacific Region, and that users in Thailand, Indonesia, and the Philippines are twice as likely to use short video apps to find new music compared to U.S. listeners. In Indonesia specifically, these apps are responsible for helping 77% of people discover new music. While other short video apps have entered the market, TikTok (which goes by the name “Douyin” in China) remains the leading platform for this type of content in Asia.
On one hand, the prominence of TikTok to discover new music in Asia is exciting because it is clearly bringing music to audiences who may never have otherwise heard it. This could be beneficial for artists because their music is being heard by more ears, and then potentially researched and downloaded by the users, or directly attributed to them if the sound happens to use the TikTok SoundOn feature. On the other hand, if the sound on TikTok was uploaded by someone other than the artist and is protected by a DMCA-style safe harbor, the artist will lose out on any TikTok revenue. The result of this is that Asian and Non-Asian artists may find that their music has spread to countries they have never even stepped foot in, but due to TikTok’s lack of protection for copyright, the work has the potential to be completely misattributed or unattributed in the Asian market.
The European Commission is considered advanced in addressing the value gap for musicians. Recent legislation and efforts by European music organizations have led to a new “DSM Directive”, which requires member states to hold user-upload service providers accountable for hosting unlicensed content. While there are still a few exceptions, this directive severely narrows safe harbor immunity and makes content-sharing services liable for the “making available of copyright-protectedcopyright protected works and other subject matter”. This puts the ball into the platform’s court, requiring them to be proactive in their approach to preventing copyright infringement, rather than reactive.
The DSM Directive passed in April 2019, but was not without controversy. Several public protests were held in opposition to the legislation, and petitions gained popularity throughout Europe as well. A large source of opposition appears to have been content creators on platforms like YouTube and Twitch, as well as journalists who feared the changes would deprive them of their author’s rights. In particular, there was tension around Articles 15 and 17 of the directive. Article 15 reinforces the rights of publishers of news, and Article 17 lays out the new obligations for online content-sharingcontent sharing platforms. Resistance in Europe was wide-spread with protests seeing turnouts in the hundreds of thousands.
On the flip side, many acknowledged and supported the position that while YouTube controls 60% of all streaming audio business, it pays out only 11% of artist revenue, which is resolved by the directive. Since the DSM directive was put into place, IP lawyers across Europe have tracked its progress throughout key jurisdictions. Articles 15 and 17 remain the most controversial across the European Union, and there are still questions about how the Articles will be applied in practice. The takeaway from this implementation is not yet clear, but the International Review of Intellectual Property and Competition Law concludes that this is “a testimony to the complexity of copyright”, and that the conflicting interests that underlie these issues make it clear that continued dialogue in Europe and internationally is “unavoidable and welcome”.
With TikTok usage growing every day amongst young Europeans, the issues that the DSM Directive attempts to resolve with YouTube and other content-sharing services are more relevant than ever. Setting a system in place that values the attribution of creative property and discourages widespread infringement will no doubt have an impact on TikTok as the directive is implemented in more countries throughout Europe. Although results are not yet measurable, based on the goals of the directive and the anticipated impact on YouTube, I believe that the DSM Directive is a positive step towards helping artists in Europe maintain control over their creative property in the digital space, on TikTok and beyond.
As new technology develops and platforms like TikTok continue to grow, the global copyright system is going to require a major upgrade. While non-profits such as the Mechanical Licensing Collective are intervening to make the current system work, the reality is that the current copyright laws are structured for a slower-paced world that no longer exists. Safe harbors from DMCA-style provisions continue to allow copyright infringement to run wild on content websites such as YouTube, and the problem extends to newer platforms like TikTok. It is long overdue that the rest of the world develop legislation such as the DSM Directive in Europe and learn from the bumps Europe faced along the way. If the global market does not adapt to our current reality of rapidly spreading music, the value-gap for musicians will continue to grow, and musicians will be pushed into further financial instability. Many musicians and potential musicians throughout the world will be discouraged from making music altogether if we do not develop a reliable and widespread means of protecting music copyrights over the internet.
TikTok has the enormous potential to be an exciting place for musicians, where content can spread all over the world with just the push of a button. For the subset of musicians whose work is correctly attributed on TikTok, the app can be a gateway to new audiences and new opportunities. For the unfortunately large proportion of musicians whose music is unattributed or misattributed on TikTok, the current legislative framework around the world is such that unless the user actively seeks out the artist’s work on another platform, they may never see a cent for their efforts. If as a society we value the creation of music and want it to continue to be at the center of our cultures, our legislative and legal systems must adapt to reflect that value.