State Champ Radio indie labels
As the showdown continues between Universal Music Group (UMG) and TikTok after the world’s biggest record company pulled content by its artists and songwriters from the video-hosting social media site, it seems as though the ban has created a window of opportunity for independent music acts.
A look at the upper echelon of Billboard‘s TikTok Top 50 chart shows that most of the top 20 entries on the chart are independent recordings, including Dasha’s breakthrough “Austin,” Mitski’s “My Love Mine All Mine,” Djo (a.k.a. actor/musician Joe Keery)’s “End of Beginning,” and even Bobby Caldwell’s 1979 song “What You Won’t Do For Love.” Prior to UMG’s TikTok ban, independent artists, music from independent artists already made up a significant portion of the TikTok 50 chart, which debuted in September 2023, but without UMG artists’ or songwriters’ works on the platform — which by Billboard‘s recent estimates affects more than 60% of the most popular songs in the United States — the pathway to success seems more clear than ever.
However, top independent music executives have a message for artists in the sector: “Not so fast.”
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As UMG’s ban drags on, independent music executives are advising artists to look at the bigger picture — and also to use this as an opportunity to look at what rights they do and don’t control.
“I truly hope we don’t do what we so often do in the music industry, which is say, ‘Oh, this is an opportunity for me to get a bit of an advantage,’ and then take the advantage, but ultimately damage the ecosystem,” says Richard James Burgess, president/CEO of the American Association of Independent Music (A2IM). “I think we are sort of at a critically bad state, in terms of the amount of money that’s being paid through [to artists]. That works out fine if you’re an aggregator, distributor or label, and you’ve got enough copyrights. But it’s extremely difficult for the artist to generate enough copyrights to make a living from if someone’s not a household name.”
Burgess continues, “TikTok is an extremely bad actor in terms of the types of deals they do and the structure of their deals. It’s almost like trying to play the lottery — if you get a viral TikTok, it can have an impact on your sales, but how much money does TikTok make from us trying to get that sort of viral spike? They should be paying for the use of music and they’re effectively not paying. I think Universal did a great thing here, and my membership, my board, supports that position.” (A rep for TikTok has declined to comment for this story).
In a 2022 Billboard story, one executive from an independent label noted that artists on his roster earned approximately $150 from TikTok from around 100,000 videos that were made with their music. Meanwhile, in the same report, a marketer who spearheaded a campaign for a music single that was used in approximately half a million TikTok videos noted that his artist earned less than $5,000 from TikTok, though views rose into the billions.
While there are opportunities for increasing numbers of independent artists to gain greater traction on TikTok during the platform’s impasse with UMG, “it’s important for artists to use the opportunity to focus on their own art instead of chasing trending sounds or being the one-millionth person to cover a hit song,” says Jody Whelan of independent record label Oh Boy Records, which was founded in 1981 by the late singer-songwriter John Prine and which now represents music from Prine, Kelsey Waldon and Arlo McKinley, among others. “If you’re lucky enough to go viral on TikTok, you want folks to stick around to hear what you have to say.”
For many contemporary acts, TikTok is a key component of their marketing plans, with labels and managers urging artists to create content in hopes of driving listeners to streaming platforms. A 2023 report, commissioned by TikTok and facilitated by Luminate, noted that 62% of U.S. TikTok users pay for a music streaming service, compared to 43% of all consumers.“TikTok user engagement metrics are strongly associated with streaming volumes,” in the United States, the report stated. “In other words, higher TikTok engagement — whether that’s likes, views or shares — corresponds with elevated streaming volumes.” The report also noted that TikTok users are more engaged with other areas of music-related consumption, claiming that in the United States, 45% of TikTok users purchased music-related merch over a year-long span, compared with 35% of overall music listeners, while 38% of TikTok users attended a live music event during the year, compared to 33% of overall music listeners.
Even with stats like these, Whelan says the TikTok/UMG battle should serve as a cautionary tale to realize how even so-called independent artists can get caught in the ban’s web because of an affiliation with UMG or UMPG. “This should also serve as a reminder to the independent community: You can’t rely on someone else’s platform to reach your audience,” Whelan says. “This month it’s UMG, next month it could be your distributor. The algorithms and priorities of social media companies and the streamers continuously shift. You have to be able to control the means in which you communicate directly with your audience, whether that’s by email or by text (we also still send out postcards to our fans!).”
Stem CEO Milana Lewis agrees, seeing the situation as a “great moment to highlight the difference between independence and autonomy. Artists believe they’re independent when they do a deal with the independent distribution arm of a major label because their deal terms might be more flexible. In reality, they still have very little control over their rights, and this is a great example of how a big corporation is deciding on their behalf whether or not their music is available on a platform and whether or not they are willing to trade off earnings for exposure.”
Independent artists should be taking this time to examine their relationships with all social media and make sure they are taking full advantage of each platform despite TikTok’s current dominance, says Seth Faber, Stem’s general manager of music distribution and payments. “Time will tell if Universal’s maneuver will lead to a meaningful redistribution of the viral pie. In the meantime, artists should continue to lean into the full landscape of snackable content,” Faber says. “The power of Instagram’s Reels, Spotify’s Clips and YouTube’s Shorts aren’t to be ignored. Diversify those content portfolios.”
For Burgess, UMG vs. TikTok is a repeat of an age-old battle pitting the industry against artists, with artists often coming out on the short end of the stick. “[TikTok] plays this promotional exposure-discovery game. How many times do we get sucked into that?” Burgess asks. “Radio hasn’t paid [artists] for recorded music. MTV didn’t pay. We keep making the same mistakes. Good thing is that Universal is big enough, and especially with the publishing and everything, the tendrils from that go far and wide.”
Burgess further likens the UMG-TikTok battle with the ongoing battle with secondary ticket markets, saying that most of the money is not making its way to artists. “That is the essence of the problem,” he says. “It would be good if people did the right thing here and stood together to get a better deal for everybody.”
At the SONA Warrior Awards in October, hitmaker Justin Tranter used his acceptance speech as an opportunity to warn the music business: “If we’re not careful,” he said. “We’re just not going to have any songwriters left.”
It used to be a lot easier to make a living as a songwriter. In the days of physical records, songwriters would get paid with each album sale, even if they had the least popular song on the album. Now, in the streaming era, songwriters say the only way to get a livable wage is to write the album’s breakout single. Getting a song on AM/FM radio is still a good way to make money, but radio hits are tough to come by. Plus, there’s the problem with artists demanding cuts of publishing income, even if they didn’t pen the song, and writing rooms have grown bigger than ever. For these reasons and more, songwriters like Tranter say the current business has led to the “decimation of the songwriter middle class.”
To try to alleviate some of the strain facing songwriters, three small independent labels – Tranter’s Facet Records, The Other Songs and Good Boy Records – have made a new pledge they hope will catch on: giving songwriters a percentage of master royalties— or “points” — on every single record.
“We didn’t feel like the industry was changing fast enough to fix this,” says Billy Webber, co-founder of London-based indie label The Other Songs, which has Ren, Navy and SUPER-Hi on its roster. His company, founded alongside brother Alastair Webber, started first as a series of events, offering songwriters the chance to perform their unused pitch songs in front of a crowd of publishers and advertisers. From the start, Webber says, they knew they wanted to not only take care of their artists, but also to look after the writers behind their records.
In 2020, The Other Songs started offering four points to songwriters on every recording, split between however many writers there are. (The policy excludes writers who are also the artist or producer, roles which already receive cuts of the master income.) They call it the “TOS Writer Royalty,” and it is taken from the label’s share of revenue — not the artist’s.
Tranter’s Facet Records — home to emerging talent like Jake Wesley Rogers, Shawn Wasabi and Shea Diamond — announced earlier this year that it would start a similar program, offering three points from the label’s share to songwriters, also split between however many non-performing writers were on the track.
Jaime Zeluck-Hindlin — founder of Nonstop Management which represents hitmakers JKash, Michael Pollack, and Ryan OG — says she has been calling for a standardized system for songwriter master points for years. She explains that her larger writers can sometimes get half a point or a point on a master when they have enough leverage to negotiate it, but it is still considered a luxury for anyone to receive. “It’s not the norm yet,” she explains. These days Zeluck-Hindlin asks for points for all her clients, not just the hitmakers, and has been making some headway, but she notes it’s a careful conversation that varies project-by-project. “More than ever,” she says, “it’s so hard for songwriters to make money, so I don’t feel as bad asking anymore.”
Writers and their teams are in a difficult position when asking for master points: They don’t want to push too hard and threaten getting cut out of sessions for being labeled “too demanding,” and if an A-list artist wants to cut a song, their name and image alone could propel it to success.
Songwriters historically have not received payment for the master recording, because they are not part of that formal recording process like producers and artists. But now, citing economic hardship for writers — even with a song that is a streaming “success” — it has become more common. “I’ve noticed people are way more open to the conversation than they were before,” says Zeluck-Hindlin.
It might seem like giving a songwriter master income is a band-aid for a larger issue, but those who are fighting for it feel it is the best option available, given the current system. Streaming rates on the publishing side have always been considerably lower than on the master side, and in the U.S., publishing income is regulated by the government, making it much more difficult to make changes.
Good Boy Records, a label started by producer Elie Rizk and entrepreneur and manager John Zamora that represents Mazie, Judith and Georgee, is also working on their own system for master points. “We want to give out one point per songwriter,” says Rizk. The team at Good Boy started to work on finding a way to cut in songwriters since Mazie hit it big with her song “dumb dumb,” which helped Good Boy recoup its distribution deal with Virgin and see “real money” for the first time earlier this year.
By May, the team paid every songwriter who had ever worked with the emerging label a small non-recoupable fee as a thank you. “Since then, we have gotten savvier with our system,” says Zamora. “We treat songwriters like we treat producers – with fees and points every time, but we are still evolving as we go.”
Some producers are also hoping to address the economic problems facing songwriters. Producer, Tre Jean Marie, posted to Instagram this summer that he would be giving £500 of his production fee to non-performing songwriters on every major label release he has. “I believe that the record labels, turning over billions of pounds in revenue every year, should shoulder the responsibility of ensuring songwriters are compensated for their time and work, but until that happens, I want to help,” he wrote. Rizk says he has also shared a portion of his producer fee and points with songwriters on the recent single “Heartbroken” by Diplo, Jessie Murph, and Polo G to makes the payments more equitable.
The heads of the three indie labels say that they hope that by being public about their new offerings for songwriters it will encourage other labels, especially larger ones with much greater financial impact, to follow suit. Tranter says they are already talking with one “pretty large company” to discuss how to implement a similar system at that company and is hopeful for more to follow suit.
But he is not confident the majors will accommodate songwriters anytime soon, especially those that are publicly traded. He thinks there are still other changes that can be made within any label to make it more songwriter-friendly, like offering per-diems, free lunch or free transportation to sessions.
“If we can do it [as a new label], then pretty much any record label that’s really taking itself seriously can do it as well,” Webber says. “Songwriters are basically the beating heart of our industry. Without them, we’re not going to have any masters anyway.”
The independent Latin music industry is having a great moment, with acts like Fuerza Regida, Bizarrap and Peso Pluma dominating the charts and selling out arenas from Mexico and Argentina to the US and beyond. And the heads of three of the most successful independent labels on the market would not conceive of any other way of working today.
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“Independence is priceless, it is the best thing that can happen to us,” says Fede Lauria, CEO of Dale Play Records, which represents Argentine stars such as Bizarrap and Nicki Nicole, highlighting the speed with which they can respond to the needs of its artists by not depending on third parties.
Lauria made this statement on Tuesday (October 3) at Latin Music Week 2023, during “The Power Players: Indie Edition” panel moderated by Billboard‘s Leila Cobo and presented by Lexus. The panel also featured Jimmy Humilde, CEO of Rancho Humilde (label of Mexican regional music superstars like Fuerza Regida and Natanael Cano); and George Prajin, CEO of Prajin Parlay and manager and partner of Peso Pluma. They are, in short, the heads of three of the most successful independent labels on the market today.
For Humilde, who began doing flyer parties in California and over the years rose to become one of the most successful Mexican music executives, it’s about doing “what we want… what we feel,” without having to ask permission. It has worked for him, and “coming from very low, it is a very big blessing because we appreciated it more,” he said.
Prajin, meanwhile, compared the current situation with his beginnings in the industry some 40 years ago, when an indie label could not compete with the big ones because there were no streaming services and slots on the radio were limited, as were the resources to promote indie artists. “Today’s artists have direct engagement with the audience through social media and independent companies can compete at all levels. We lead. We don’t follow,” he said.
Each one, in their own style and way, is committed to taking their artists to the top. Humilde, for example, says that he does not sign artists but rather has business agreements with them — as in the case of Legado 7, with which he established Lumbre, the label where Yahritza y Su Esencia began.
Lauria, who helped launch a wave of urban acts from Argentina including DUKI, Nicki Nicole, Rei, WOS, Rels B and others who began in their teens and soon after were filling stadiums and traveling the world, highlighted the importance of accompanying them in their development and ensure their physical and emotional well-being. “Artists also suffer… they are not aliens. This generation Z of artists has to prepare at superhuman speed to meet that pressure,” he declared.
Celebrated for more than 30 years, the 2023 edition of Latin Music Week includes a Superstar Q&A with Shakira; the Legends on Legends chat with Chencho Corleone and Vico C; Making the Hit Live! with Carin León and Pedro Capó; a panel with RBD’s Christian Chávez, Christopher von Uckermann, and Maite Perroni; Superstar Songwriter discussion with Edgar Barrera and Keityn, among many other panels, Q&As and workshops.
See the ultimate Latin Music Week guide here. This year’s Latin Music Week, taking place Oct. 2-6, also includes showcases by Peso Pluma, Mike Bahía and Greeicy, DannyLux and Fonseca, to name a few. Check out the dates and times for the showcases throughout the week here.
Official partners of the 2023 Billboard Latin Music Week include AT&T, Cheetos, CN Bank, Delta Air Lines, Lexus, Netflix, Michelob ULTRA and Smirnoff.
Latin Music Week coincides with the 2023 Billboard Latin Music Awards ceremony, which will broadcast live from the Watsco Center in Coral Gables, Fla., on Thursday (Oct. 5) and will air on Telemundo. It will also broadcast simultaneously on Universo, Peacock, the Telemundo App, and throughout Latin America and the Caribbean on Telemundo Internacional.
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