By skyforbes 
The surprising economics of attention in the age of algorithmic promotion
The music industry’s relationship with social media has always been complicated. It’s spent decades grappling with the rise of digital platforms, from Napster’s early disruption to YouTube’s dual role as friend and foe. But nothing quite prepared it for what happened when Universal Music Group pulled the plug on TikTok in February 2024.
What followed wasn’t the promotional apocalypse many predicted. Instead, something far more interesting occurred — and the implications stretch far beyond one label’s licensing dispute.
The Experiment Nobody Planned
When UMG removed its entire catalog from TikTok following failed negotiations, the music industry inadvertently created one of the largest natural experiments in platform economics it’s ever seen. Nearly 660,000 songs in the US market and 3.5 million in Germany suddenly vanished from the world’s most influential discovery platform.
The conventional wisdom was clear: TikTok drives streaming. Remove your music from TikTok, watch your Spotify numbers crater. Industry insiders had been preaching this gospel for years, backed by impressive statistics showing that 67% of TikTok users are likely to explore songs on other streaming platforms after encountering them on TikTok, with 75% of these users discovering new artists via TikTok.
But when researchers analyzed what actually happened during those three months of silence, the results challenged everything they thought they knew about modern music discovery.
The Cannibalization Paradox
The data revealed a counterintuitive truth: UMG songs that disappeared from TikTok actually saw their streaming numbers increase by 2–3% on platforms like Spotify and Apple Music. This wasn’t a marginal error — it was a consistent pattern across two major music markets, suggesting that TikTok was cannibalizing traditional streaming more than it was promoting it.
The math is stark. Researchers estimated that UMG was potentially losing $788 million annually from Spotify and YouTube due to listenership on TikTok — and that calculation didn’t even include other major platforms like Apple Music.
This cannibalization effect makes sense when you consider how music consumption has evolved. TikTok users are significantly more likely to use a paid music streaming service than the average consumer, with 40% of active TikTok users paying a monthly subscription for music, compared to 25% of the general population. These aren’t passive listeners stumbling onto music — they’re active consumers who might choose to engage with a track on TikTok instead of seeking it out on a monetized platform.
The platform’s evolution from discovery tool to consumption destination has been gradual but decisive. What started as 15-second clips has expanded to longer formats, with users increasingly creating personal playlists for actual listening sessions rather than just viral content creation.
The Discovery Divide
But the story isn’t that simple. While popular tracks saw streaming increases when removed from TikTok, a different pattern emerged for music that benefited from discovery and rediscovery — particularly older tracks and songs without extensive playlist support elsewhere.
This reveals TikTok’s dual nature: it simultaneously cannibalizes consumption of popular music while serving as a crucial discovery engine for “niche” content that might otherwise remain buried in streaming catalogs. The platform excels at surfacing forgotten gems and giving new life to catalog material, as demonstrated by phenomena like Fleetwood Mac’s “Rumours” re-entering charts in 2020 after TikTok exposure.
The heterogeneity in effects exposes a fundamental truth about modern music discovery: different types of content benefit differently from different platforms. Songs with strong playlist support and promotional backing might actually suffer from TikTok exposure as it diverts listeners from monetized platforms. Meanwhile, older or less-promoted tracks depend heavily on TikTok’s ability to surface content that benefits from rediscovery.
The Algorithm Economy
This complexity reflects broader changes in how we find and consume music. The rise of streaming transferred the hit-making power from mass media to algorithms; now TikTok is ushering in a new era where listeners get to directly participate in the creation of hit songs.
We’ve moved from a world where radio programmers and record executives served as gatekeepers to one where algorithmic recommendations and user-generated content drive discovery. But this democratization comes with hidden costs, particularly around the economics of attention.
Every minute spent engaging with music on TikTok is potentially a minute not spent on a platform that generates meaningful revenue for artists and labels. Companies such as Spotify, TikTok, etc., are not music companies, they’re technology companies. They make their money from ad revenues and subscriptions, not recorded music.
The revenue disparity is significant. While Spotify pays artists based on stream counts, TikTok operates on blanket licensing deals that don’t reflect individual track performance. This creates a structural misalignment where promotional value and financial value can work at cross-purposes.
The Future of Music Marketing
These insights have profound implications for how artists and labels should approach platform strategy. The one-size-fits-all approach of maximizing presence across all platforms may be less effective than previously thought. Instead, success might require understanding which platforms serve which purposes for different types of content.
For established artists with strong playlist support and promotional backing, TikTok exposure might actually reduce overall monetization even as it increases cultural impact. For emerging artists or catalog material, TikTok remains invaluable for discovery, but the challenge becomes converting that attention into sustainable revenue streams.
The industry’s response has been telling. In a fragmented music landscape, “TikTok served as sort of the one lightning rod where popularity could actually coalesce into a hit”. The platform’s potential absence from the US market has created what analysts call a “marketing apocalypse,” highlighting just how dependent modern music promotion has become on a single platform.
The Attention Economy’s Hidden Costs
Perhaps most importantly, the UMG experiment revealed the true cost of the attention economy for music. While platforms compete fiercely for user engagement, the value of that attention isn’t equally distributed among stakeholders. TikTok benefits from music-driven engagement, but the revenue flowing back to music creators remains disproportionately small compared to the cultural and promotional value generated.
This creates a fundamental tension that extends beyond music to all creative industries. How do you balance the promotional value of social platforms against their potential to cannibalize traditional revenue streams? The answer may lie in more sophisticated approaches to content strategy that consider not just reach and engagement, but the quality and monetizability of different types of attention.
Rethinking Discovery Strategy
The data suggests that the music industry needs more nuanced thinking about platform strategy. Rather than treating all social media exposure as inherently beneficial, artists and labels should consider:
Content Type Matching: Popular tracks with strong promotional support elsewhere might benefit more from focused streaming platform promotion than broad social media exposure. Conversely, catalog material and emerging artists may find TikTok invaluable for discovery.
Revenue Optimization: Understanding the true economics of different platforms means weighing promotional value against cannibalization effects. A million TikTok plays might generate less revenue than 100,000 Spotify streams, even accounting for discovery effects.
Platform Purpose: Different platforms serve different functions in the modern music ecosystem. TikTok excels at cultural impact and discovery, but streaming platforms remain crucial for monetization. The key is orchestrating these platforms strategically rather than treating them as interchangeable.
The Long Game
As the music industry continues evolving, the lessons from Universal’s TikTok experiment provide valuable guidance. The relationship between discovery and consumption is more complex than simple promotional thinking suggests. Platforms that drive cultural conversation don’t necessarily drive revenue, and maximizing engagement doesn’t always maximize economic value.
The future of music marketing likely lies in more sophisticated approaches that recognize these complexities. Success will come not from maximizing presence across all platforms, but from understanding which platforms serve which purposes for different types of content and audiences.
The attention economy has fundamentally altered how music moves through culture, but it hasn’t eliminated the basic economic realities of the creative industries. Artists and industry professionals who understand these dynamics — and can navigate them strategically — will be best positioned to thrive in whatever comes next.
Further Reading
Winkler, D., Hotz-Behofsits, C., Wlömert, N., Papies, D., & Liaukonytė, J. (2024). The impact of social media on music demand: Evidence from a quasi-natural experiment. arXiv preprint arXiv:2405.14999. https://doi.org/10.48550/arXiv.2405.14999
Ofek, E., Cheng, A., & colleagues. (2025, March 5). What happened when TikTok songs went silent for three months. Harvard Business School Working Knowledge. https://www.library.hbs.edu/working-knowledge/what-happened-when-tiktok-songs-went-silent-for-three-months
MIDiA Research. (2025, May 9). Music discovery is not dead, just evolving — the industry needs to evolve with it. MIDiA Research Blog. https://www.midiaresearch.com/blog/music-discovery-is-not-dead-just-evolving-the-industry-needs-to-evolve-with-it
Ingham, T. (2022, November). So… how much did TikTok actually pay the music industry from its $4bn in revenues last year? Music Business Worldwide. https://www.musicbusinessworldwide.com/so-how-much-did-tiktok-actually-pay-the-music-industry-from-its-4bn-in-revenues-last-year/