How TikTok Gets Rich While Paying Artists Pennies

ILOVEFRiDAY’s first song was a troll. The music video for “Hate Me” saw one half of the duo, a 21-year-old Pakistani-American rapper who goes by Smokehijabi, hitting a blunt in a hijab and making unsparing use of the N-word. Problematic in a half-dozen ways, the video was a minor sensation online, particularly among the edgy sort of joker with a meme account on Instagram. In January 2018, one such user posted a fake tweet that looked to be written by the retired porn actress Mia Khalifa that paired a screenshot of Smokehijabi from the clip with the caption, “She’s so disrespectful to all Muslim women and gives us a bad image smh.” Now, one year later, people pay awed tribute in that post’s comments section. “BRO,” says one, “YOU CREATED AN EMPIRE.”

The image was quickly copied and re-posted on dozens of other meme pages. There’s some debate whether iLOVEFRiDAY initially understood it was a joke, but they say it doesn’t really matter. “All of our fans were like, ‘Screw Mia Khalifa, we don’t like her, diss her!’ So we dropped a diss track,” Smokehijabi tells me. On that song, dubbed “Mia Khalifa” and released last February, Smokehijabi is at her absolute brattiest: “Hit or miss, I guess they never miss, huh?/You got a boyfriend, I bet he doesn’t kiss yaaaa!” Though Smokehijabi lives in Atlanta, her delivery has an almost Midwestern whine to it; her melodies are straight and piercing, catchy to an obnoxious degree. According to Xeno Carr, her partner in the group, in its first few months on YouTube, the song amassed five million views, an inspiring number for an unsigned act.

Then it hit TikTok, and people’s lives changed. TikTok is a mobile app where users can create and share short videos. After merging with fellow lip-synch app Musical.ly last year, it has become something like the new Vine. What’s new: On TikTok, you can soundtrack your videos using a massive library of officially licensed snippets of songs. Alternatively, you can upload your own audio, which enters the app’s sound bank so anyone can use it.

“Mia Khalifa” wasn’t initially in the TikTok library, so a South Dakota high schooler named Cheyanne Hays uploaded it herself. Hays already had a big social following for someone who worked at Subway, having gone viral with a silly online video where, through feigned tears, she complained that her mom had confiscated her vape because she failed English class and implored Shakespeare to “suck my dick.”

In Hays’ TikTok to “Mia Khalifa,” she stared blankly at the camera, her steady eyes making Smokehijabi’s boyfriend line seem even more comically mean. But her video was only a proto-meme, good for 16,000 likes. Using Hays’ “Mia Khalifa” snippet, a young British woman named Georgia Lee Twinn lip-synched the same lyrics for a clip that currently has more than 360,000 likes, while an interpretive dance by a user called NyanNyanCosplay has netted 315,000 more. TikTok, which declined to comment for this article, doesn’t display view counts, but they do show how many videos use a certain sound. Currently, that same 15 seconds of audio from “Mia Khalifa” has been used in over four million TikTok videos.

The songs that go viral on TikTok are refreshingly unpredictable—they aren’t a simple reflection of streambait pop or what’s big on the radio. Sure, a song like Ariana Grande’s “thank u, next” has a million TikTok videos of its own, but that’s not what defines the platform. Instead, it’s freaky, relatively unfamiliar voices like Smokehijabi’s that cut through.

For tech giants, music is monstrously big business. Though ByteDance, which owns TikTok as well as several other platforms, has yet to turn a profit, Bloomberg recently valued it at $75 billion—three times more than Spotify’s current market value. Last year, a rare profile of ByteDance’s founder, Yiming Zhang, claimed that the company is “what comes after Facebook.”

Though TikTok is currently free and without ads, there’s endless value in its trove of videos: ByteDance’s vice president says they’re able to process 50 million GB of data every day. And analyzing its 500 million users’ video clips has potential applications for content recommendation, object recognition, and, ultimately, surveillance. The website for ByteDance’s research lab boasts, “This virtuous cycle of AI has allowed us to venture into areas of machine intelligence the world has not seen before.”

That’s great for our future android overlords, but what about the musicians whose work the AI team—and TikTok’s very lucrative business—depends on to attract users? Jeff Price, the CEO of Audiam, a company that specializes in licensing, collecting, and distributing royalties from digital platforms, tells me there’s a fundamental disconnect in the way music and tech do business. “The music industry and artists—songwriters and publishers and composers—all traditionally make money off of the sale or license of prerecorded music,” he explains. “Technology companies make their money from valuations on Wall Street or venture capital or private equity, which are based on market share, and that’s based on their number of users. They don’t actually have to make money off of music to make money. It doesn’t matter if they lose money. As a matter of fact, they all lose money.”

Copyright, of course, still applies, and musicians are technically required to get paid if their work is used. For the song in any TikTok video, there are two basic copyrights at play: the right to public performance (the composition of the song, which is typically owned by the songwriter or their publisher), and the right to mechanical reproduction (the recording itself, usually owned by the label). In America, statutory damages for breaking either can make for an intimidating punishment of up to $150,000 per violation.

That’s ostensibly why, in 1998, Bill Clinton signed the Digital Millennium Copyright Act, or DMCA. Part of a global treaty in the name of innovation, it protects tech companies from copyright claims that might otherwise squash them. Essentially, the DMCA makes these companies immune from liability for the copyright violations of their users, so long as they tell them not to do it and aren’t aware of individual violations as such. They just have to take the files down once someone tells them about it, and that burden is on musicians and their representatives. When artists see a copyright violation, they send the company a fabled DMCA takedown notice—or, in the hypothetical case of “Mia Khalifa,” four million of them, one for every video that used the song.

So when tech companies do make licensing deals, it’s typically on their own terms. In 2016, Jeff Price considered an offer from Musical.ly to license Audiam’s catalog, and asked to talk to the company about making changes to their proposed agreement. According to Price, Musical.ly’s lawyers were unwilling to negotiate. He recalls them telling him, “It’s either you can sign this contract and get paid something, or don’t sign the contract and your music’s still going to be here but you’re not going to get paid anything. You’re going to have to deal with DMCA takedowns. Goodbye.” Audiam didn’t take the deal.

That’s not always an easy decision, though. Joe Conyers III is the co-founder of SongTrust, another digital rights management platform, and he explains the trouble many rights-holders have in saying no, even professional distributors and royalty collectors. “All these services will get contacted by Facebook or TikTok or YouTube, and they’ll get the manager and the artist hyped up, and they may not understand that they are not going to get paid. They say, ‘OK, well, they’re going to put me on the front page. That’s worth it. Let’s just do it for free.’”

That’s not the only tricky part. Conyers tells me about a recent study by Music Reports, a company whose database contains the rights information for 150 million distinct sound recordings. In the 1980s, Music Reports found, songs in Billboard’s Top 10 had an average of two writers and two publishers; this decade, hits typically have four writers and six publishers. “You end up with these crazy circumstances where there could potentially be hundreds of copyright claims against a video,” Conyers says. “Everyone is going to get their fraction of a fraction of a fraction. But if you’re not part of the system, you’re gonna be out of the system.”

Once all those fractions start rolling in to publishing administrators, some of which represent over 100,000 artists, deciding how to distribute the money is another hurdle. Some platforms, like YouTube, grant access to sophisticated, searchable content ID systems. Others will simply send over a spreadsheet every month or so, and it can be difficult to verify their accuracy: If a song isn’t labeled within the system, how do you search for it? What if, like TikTok, the platform doesn’t show you total views? One common solution is to go by an artist’s market share on a different platform that offers better reporting. For example, to gauge TikTok payouts, a publishing administrator might calculate the percentage of their roster’s total plays that each artist drives on Spotify, then pay them the same proportion from their TikTok buyout.

But that market share-based approach would be no help for a band like Falling in Reverse. At the time of its release eight years ago, their song “Good Girls Bad Guys” was a raunchy, retrograde pop-punk single that didn’t chart. (Sample lyric: “Sorry girl, if this is quick/So please just take it in ass and suck my dick.”) On every streaming platform, its numbers had long plateaued. Then, last year, someone trimmed the track to its 15-second hook, and on TikTok, it became rocket fuel.

There’s something almost wholesome to the meme Falling in Reverse’s song inspired. First, participants cower before the camera in their dorkiest clothes, as the song whines away: “So why do good girls like bad guys?/I had this question for a real long time.” Then they cut to a dramatic outfit change to reveal puffed chests in leather jackets or racing shirts with ripped-off sleeves, along with the lines, “I’ve been a bad boy and it’s plain to see/So why do good girls fall in love with me?”