 If you want to understand why labels are signing so many artists off TikTok, you have to first understand how the gamemates change completely from what it used to be. What's up? My name is Brandman Sean and my agency has helped over 100 artists grow their fan base and get millions of streams. I don't say that to sell you anything, just so you have an idea who you're getting the information from. Now there's five reasons that labels are circling TikTok like vultures, so they can find an artist and pick them up from the platform. And we'll start with number five and countdown that way. And number five is momentum. When you see these artists get signed on TikTok, the songs are already starting to take off. And why is that such a big deal? Well, let's just think about it like this. Well, back in the day, you can actually sign an artist and build them from ground up and expect to get a lot of money from the music because they had CDs back then. You've heard people complain about the lack of money associated with music specifically and monetizing music specifically today. Back then, that wasn't so much of a problem, right? Now, when you fast forward till today, it's a lot more of a problem. So labels, they don't want to build a business from ground up. What they want to do is find a business that's already in operation and already finding some success and accelerate the growth of that already established business, right? That's the difference. That's why they want to find artists that already have fan bases. If you look at at least a song on TikTok, that's taking off, even if the artist doesn't really have a true fan base, that song represents a good product, right? It's a hot product on the streets that's doing well and we can at least maximize this product, but that also speaks to an issue. So I'm not going to go too much deeper into the concept of momentum. If you want to hear me speak deeper about that, I actually talked about it in a video, what to do with your song. When it blows up, check it out. I'll put it in the description below. But the fact that they invest so much in singles these days, that hot product brings up another benefit, which also creates an issue, which is number four, they can make money back off of one single. Now, let me break this down. Remember, I talked about you can build a brand new business from ground up or you can actually invest in a business is already successful and bring it more success. Well, when you look at song specifically, now you're talking about that product and you can even have a hot product already or help try to create a hot product from ground up. And this is the situation that so many labels or just people in the industry find themselves in. Well, if I had $10 and I could put it on 10 songs, so now I have a $1 invested in 10 different songs. Hopefully one of those things will start popping. Right now, what if I could just withhold my $10 and just wait to find a song that's already working and give it $10? That's a great thing for labels, because it's really easy to do that today. Not that people can just put their music on streaming platforms, but the issue is now labels are even more focused on singles than they are the artist themselves. A lot of times because I can make my money back off of that one single. If I invest in the white single, I can literally say, oh, this song has momentum and if it has enough of it, I'm going to invest in that particular track and now whatever else happens with that artist, you know, I'm break even already. So hopefully they give me more success, but I'm not so invested in it and that creates a short-sighted relationship. Oftentimes, which is where a lot of artists get caught up because they think it's more of a longstanding relationship based on the conversations on the front end, but the reality is not so much. All right, number three, it's a lot easier to break even off of TikTok songs. Now I talked about the importance of breaking even as fast as possible. But let's think about it this way. A label is an investor, right? They're investing in a product and any investor wants to make their money back, so they have to manage their risk to make sure they make that money back. Don't act like you understand that because all of us want to make our money back if we put our money into something. We want to return on our investment. So that's what a label is looking at because on TikTok, the unique nature of how songs blew up, you already have culture moving around you. You have culture organically working for you. So you don't have to spend as many dollars to bring success to the song as you would on any other platform. A song could be going viral on Spotify, which is great, right? And people do invest in those. But there's a difference if something's just going viral on Spotify based on play listing, because you still have to figure out how do I connect this on another level in culture where if it's already connected in culture, which is the hardest thing to do, right, influence people in the masses and begin convincing them that this song is a good song. If I already have that out the way, then all I have to do is use my plug and play resources to make sure the song gets shelf space and all these other platforms, radio, playlisting, whatever I can, based on my relationships resources and the time I got involved in the track, right? So it's a lot simpler to make things move. Not only do you get your investment back more likely off of the organic momentum from TikTok without doing any work, the work that you do put in is now going to give you even greater returns than it would otherwise. It's like pushing a car that's already going downhill versus trying to push a car uphill just for it to finally go downhill. All right. Number two, market share, market share, market share. Labels want market share and they're fighting a two-way battle at the time. It used to just be label versus label, right? One label wants to make sure they got the hottest acts, the biggest artists and they're dominating out there. It's just, you know, competition is business. However, that's even more meaningful than it used to be because on Spotify, there's a pool system, which means yes, everybody has streams and they get paid for streams. But people who dominate a certain portion of the streams actually get a larger percentage. I'm just going to make up a number real quick. But if I had 70% of the streams, I might get paid a whole penny per stream versus somebody else who has below 50% getting paid a quarter per stream. So not only is it less streams, they're getting paid less money per stream, right? So once you get into a dominant market share, you're actually getting paid more for the same metrics. But that's just on the label side, right? Label versus label, now you have this other competitor, which is the entire indie marketplace. More and more artists are not signing label deals. And as they hold out, but they still exist on these platforms like Spotify, Apple Music, etc., they are dominating market share themselves. So I'm not just competing versus the labels. I'm competing against these millions of artists who are out here trying to work their way up the ladder so they can make more money on Spotify and other DSPs. So oftentimes we hear the conversation of artists not signing to a label so they can reap more benefits of their own labor, but you don't really hear how artists not signing is directly impacting the revenue, not just because of what you took from them, but the impact of your portion being larger actually negatively impacts the return on their investment. That's like them getting $3 as a return of each dollar spent versus getting $10 as a return on each dollar spent. Labels do not want to see independent artists dominate the marketplace. And number one, the last and one of the most important reasons that labels are signing so many of these artists off of TikTok for a long term vision of catalog. Now what do I mean by that? Catalog, catalog, catalog is a collection of songs. The collection of your songs is one of the most valuable things that you can have. You've probably heard people talk about, hey, if you have a song blow up and then you have a catalog, the rest of your music will begin to get heard over time. And then that catalog becomes more valuable as more and more people begin to stream it, not just a direct streaming impact from the DSPs, but it's also the ownership of this music that gets more value over time as you get more fans. Great, right? All sounds pretty good. Okay, but you have to think about a label from a label standpoint. And I'll preface it with this. We've seen artists sign $400 million deals selling off their catalog. We've seen big artists sign $200 million deals signing off their catalog. Future just sold off his catalog for like $70 million. And I know you might not be there yet, but the important thing to understand is there's a huge value to catalog. A company called Hypnosis set aside a billion dollars just to purchase catalogs. AWOL just sold a bunch of independent artist catalogs that they had rights to for a billion dollars, by the way. So what the hell does that have to do with TikTok? Well, think about it like this. If I can invest in an artist single that already shows the value of being a hit, it has that momentum and I can invest in that single instead of wasting time trying to create a hit single, then I can invest in a single that's going to give me a return on my investment. I'm probably going to break even, right? We already talked about that because it's already successful. It's going to probably be successful in the future enough for me to at least make my money back and I might gain even more money from the rest of your music. But even if I don't, I have that song in my catalog. And what if I go sign another artist off of TikTok and I at least have that song of his in my catalog? And then I have that song of hers in my catalog. And year over year, I'm doing this time and time and time again. I don't have to be invested in the overall success of the artist for me to win because I already have the catalog of these proven songs that I can then sell off. If I want to, because the value is growing year and year, me as a label, I'm having a greater and greater catalog being built out that I didn't really even have to put that much risk in to acquire because I use songs that already had momentum off of a platform like TikTok that was lower investment, had organic drive and success. And most artists don't really realize once it starts moving, they don't understand how far the music will continue to go without the label. And now once you sign to the label, you're seeing this skewed vision. Thinking the label's doing that and it's really a lot of times you or at least TikTok itself would already happen on a platform. So now that's a sweet spot for a label, right? I basically got a hot single for free to be added to my catalog. And I've done this 100 times over 200 times over 300 times over. Next thing you know, it's five, 10 years later and I have an extremely valuable catalog and I might sell it for a billy, right? That's an extremely, extremely important benefit to signing artists off of TikTok specifically, right? Low cost investments with high, high potential returns and me as a label, a risk management company as I invest, right? I have to be very, very risk adverse, very conservative. This is the sweet spot. This is the perfect time, the perfect platform and climate for me to do just that. Make a low risk investment with high potential returns and unfortunately, many artists are getting caught in situations where the artist success and the label success still aren't quite aligned because, hey, as long as this one track that you got is still with us, we're good. And I know you want to have a career, but we're already good. That would be nice, but we're not as invested in you having continued success as you are. So keep that in mind. TikTok is a beautiful space to be, but if you hop in the wrong situation, it can get ugly. Now, with that said, I have plenty of videos up here on YouTube of how you can be successful on TikTok specifically, help you break down, understand the platform. We've helped multiple artists do viral hits, literally over billions of streams finding success because of TikTok specifically. So I'm going to put a video over here in the corner. Go ahead and check that thing out. There's a whole playlist of videos breaking down how you can apply TikTok to your own strategy so you can get success and hopefully go viral. See you in this next video.