Photo Credit: BoliviaInteligente
TikTok is one of the most notoriously artist-unfriendly platforms on the planet. But according to DMN’s latest intel, the UGC giant is now overhauling its payout methodology to something slightly more reasonable.
Spotify is notorious for its paltry paychecks to artists. But sadly, there’s way, way worse out there.
Irving Azoff has repeatedly blasted YouTube for its criminally low royalty rates, though TikTok is also among the worst-paying platforms for artists, creators, and IP owners. Now, however, TikTok is about to unclench its fists a bit, according to details shared with Digital Music News this month.
Those monetizing — or attempting to monetize — their music on TikTok are oftentimes shocked to discover the user-generated giant’s shockingly low payout structure.
Specifically, TikTok has traditionally only paid for the initial use of music in a video, regardless of how many times that video is ultimately viewed.
As reiterated by distribution platforms like Distrokid and CD Baby, this means that even if a video clip gets played one billion times, the IP owner of the synced song is only paid once. TikTok’s model is completely different than the per-play structure found on streaming music platforms like Spotify and Amazon Music, where payouts are based on the actual plays of a song.
For TikTok challenges, duets, stitches, or other variations of the original video, a new ‘event’ is generated and a new payout is triggered. But absent any remakes or variations, artists and IP owners aren’t paid when someone simply watches a video with their song.
Now, that structure is about to change — for the better.
According to details tipped to DMN, TikTok is now shifting its payout methodology to also include multiple plays of the same video. So, if a single clip goes viral with a billion views, that video will now be counted one billion times instead of just once.
The same goes for variations and new creations, like challenges, which can also rack up millions of views on their own. Accordingly, under the new rules, a viral video can now become a wildfire, as multiple videos can generate royalties based on their total plays. In some cases, total payout levels could increase by a dramatic multiple.
Unfortunately, the changes aren’t happening overnight, with sources pointing to a changeover during the summer (early Q3) timeframe. Narrowing the drop-date further, a late-July 2026 transition was floated by one source. TikTok itself has declined to comment on any changes.
That’s several long months away. But for many content owners, it’s better late than never. One fed-up IP owner told DMN that ‘the system is a total mess with lots of people complaining,’ while adding that ‘this is an attempt to push things into a new sphere.’
It’s important to note that this won’t impact rights owners who’ve already forged more favorable deals with TikTok.
That includes Universal Music Group and other major labels Warner Music Group and Sony Music Entertainment, which recently structured more favorable compensation arrangements. Just recently, UMG pulled all of its content from TikTok, citing unreasonably low payouts; then-TikTok chief Ole Obermann was eventually forced to soften an extremely artist-unfriendly payout approach.
According to those familiar with those deals, UMG now receives a ‘big fat check’ for the use of its catalog, and ‘everyone’s happy’ (which sounds about right). Incidentally, others like UnitedMasters also struck more favorable TikTok deals in the follow-on to UMG’s scorched-earth pullout, though TikTok famously dissed indie label collective Merlin.
There’s also the matter of major music publishers.
According to one well-placed source, many publishers are already receiving substantial upfront, recoupable advances from TikTok. That renders the per-creation vs. per-stream issue largely moot, though, separately, it appears TikTok is also attempting to shift away from that pre-pay structure.
Separately, it’s unclear how the US-specific ‘TikTok USDS Joint Venture’ factors into all of these changes.
One possibility is that the changes were driven by the US-based investment group, though this is purely conjecture. More broadly, it’s unclear whether the per-play shift will apply globally or only to specific countries.
Stay tuned.
