I enjoyed sharing my thoughts on the UMG and TikTok dispute with BBC News. I have more thoughts…
UMG’s pulling out of its licensing deal presents an opportunity to discuss creator revenues.
On most social media platforms, ad spend is the predominant supplier of funds to royalty pools.
Ad revenue royalty pools are limited, and often not available to all content contributors on social media platforms.
Who are content contributors?
👉 Users generating content (the casual user)
👉 Creators (professional or hobbyists)
👉 Influencers
👉 Brands and companies
(Tell me in the comments if I missed any!)
There are also asset licensors that offer content to the contributors above that can be mixed into content. For example: music labels/publishers, sponsored or licensed overlays, filters, effects, etc.
The asset licensors can potentially negotiate for upfront payments, back-end ad revenue splits, or use-based fees. In some instances, they are the ones paying the platform! A platform brings a large number of eyes that can drive marketing campaigns with assets that platform users can mix into content and engage with to drive campaign awareness.
Who from the content contributor side is typically not part of direct negotiations for platform payouts? Creators.
Influencers, brands/companies, and users generating content have a minority or no stake in revenue generated by a platform. 🤔 Why? Because they are either getting paid to post content (sponsored content or affiliate rev share) or have a brand-building interest in posting content.
The everyday social media user arguably has no stake in getting paid by a platform and isn’t seeking the incentive (or coming with an underlying financial need) to post.
That leaves this middle area of creators that are successful at creating content that keeps users on a platform engaged and coming back for more.
Creator funds have been significantly changing or disappearing entirely over the last year.
Also, creator ad rev share programs are not available on all platforms, or limited to a select group of creators.
The lack of payouts, or decrease or dilution of the payouts, from platforms is what leads many creators to pursue sponsorship deals, selling services (courses, digital content, communities and personal access), merchandise, or traditional media opportunities (such as book and media production deals).
My hope is that the impact of UMG artists and songwriters being absent and bringing a noticeable silence to a platform like TikTok allows the chance to discuss the value that creators also bring to the very same platforms.
What do you think? I’d love to hear other perspectives in the comments!