TikTok's test in Australia that limits some users' access to licensed music is to study what is trending, how users access its service, and more, per a source
Glenn Peoples / Billboard : See also Mediagazer
Context & Ripple Effects
TikTok has spent the past two years building out its music stack on both sides of the table: it runs the SoundOn distribution service for artists, has been testing TikTok for Artists analytics in Australia and other markets, and published a TikTok-funded report arguing its users are likelier than average to pay for streaming and concerts. The Australia test reported by Billboard adds the missing piece: by limiting licensed music for some users, TikTok can measure how much of its trending content and engagement actually depends on the licensed catalog it pays for.
That measurement matters because licensed music is one of TikTok's largest recurring costs, and Australia is a market where the company already has regulatory friction — the country's News Bargaining Incentive taxes tech platforms' ad revenue unless they cut deals with local media.
First-order effects
- A subset of Australian users gets restricted access to licensed music, while TikTok gains first-party data on what still trends and how those users reach the service without a full catalog.
Second-order effects
- The test hands TikTok leverage in licensing negotiations with major labels: if engagement holds with less licensed music, the catalog becomes a negotiable variable rather than a fixed cost, undercutting rightsholders' pricing position.
- The findings would also sharpen TikTok's counter-narrative to labels — its own funded research already frames the platform as a streaming and concert-sales funnel, and test data could quantify how little catalog it needs to keep that funnel working.
Third-order effects
- If the pattern holds across tests, short-video platforms could restructure their relationship with the music industry from paying for broad catalog access to licensing only the minimum set of tracks their recommendation engines prove they need, shifting the value exchange decisively toward the platform side.
The trend: Short-video platforms are empirically testing how much licensed music their engagement truly requires, turning music licensing from a fixed cost of doing business into a data-backed negotiation.