Trapital - short-form video wars

short-form video wars

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Hey! A new report from Hindenburg Research came out today that claims a large number of Block and Cash App’s accounts are fake, involved in fraud, and that hip-hop artists use it to “scam, traffic drugs, or pay for murder.” It’s disappointing to see, especially since I wrote a popular essay on Cash App’s partnerships with hip-hop.

But Hindenburg also made this odd compilation video of artists saying “Cash App” in songs as proof of its scams. For what reason? Hip-hop music is often on defense for its lyrics being perceived as public testimony instead of an artistic form of expression. The report is worth reading, but I could have done without that part.

Today's Trapital Podcast episode is a deep dive into the short form video wars. TikTok, YouTube Shorts, and Instagram Reels are vying for your attention. Short form video is where music discovery happens, and every major company wants in. To break it all down, I was joined by MIDiA Research’s Tati Cirisano. Let’s dive in.

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TikTok vs Shorts vs Reels

In this week’s episode, we kicked things off by giving props to the short-form video OG, Vine. The best Vine creators could tell an entire story in 6 seconds or less. It was impressive. Unfortunately, Twitter’s 2012 acquisition of Vine left a lot to be desired for the app that shut down in 2016.

But Vine paved the way for TikTok, YouTube and Meta to be where they are today.

TikTok’s cultural cache

Trends start on TikTok and then trickle down to its competitors. When artists prioritize their promotional strategy, it often starts on TikTok. When a song goes viral from short-form video, it most likely goes viral on TikTok first. We’ve all seen TikTok videos repurposed and reshared on other social media formats. But it’s rarer to see other short-form videos repurposed for TikTok.

TikTok is the Bentley of short-form video. Right now, the other platforms are Chrysler 300s. Like Katt Williams would say,

In our podcast episode The Short Form Video Wars, MIDiA Research’s Tati Cirisano points out that TikTok considers itself an entertainment platform, not a social media network. On social media, users can run out of content if their followers don’t post enough. We’ve all seen the infamous (yet shameful) “You’re up to date!” notification on Instagram.

That doesn’t exist on TikTok. The algorithm and it’s For You page thrive on the endless scroll of its most engaged users. It’s like watching MTV in the 90s. There was always something on.

But this generation’s MTV still has its threats. The Biden administration wants ByteDance to sell the company to a U.S. firm. The “TikTok ban” talk has been ongoing for three years now, but pressure seems to mount each day.

​Listen to the full episode or read below for more.

YouTube Shorts’ ecosystem is its strength

In January, YouTube’s head of music Lyor Cohen made a strong statement about the format in an interview with Music Business Worldwide:

He didn’t say TikTok by name, but the message was loud and clear. TikTok’s music discovery doesn’t directly lead to music listening on the platform. It’s working on that, with Resso and the future launch of TikTok Music, but it’s not there yet. It makes sense for TikTok to enter this space, but it may be tough.

Meanwhile, both YouTube and Meta have ecosystems beyond their endless scrolls. YouTube is one of the best community-building platforms on any social media platform. Lyor’s pitch is that YouTube Shorts is a funnel to full-length YouTube music videos and songs with less friction. Users don’t have to leave one app and open another. The logic makes sense but I would love to see data.

For instance, I wish we could compare short-form video to streaming platform pipelines. Which would have the highest conversion rate of video views to music streams: TikTok to Spotify, or YouTube Shorts to YouTube?

The potential downside for Shorts stems back to TikTok’s advantage. TikTok has grown to 1 billion-plus monthly active users by creating loyalty to the platform as the destination, not necessarily the creator. To be clear, many creators have succeeded on TikTok, but this is more about its macro positioning. Meanwhile, Shorts and Reels live within platforms that are more creator-friendly. It may be hard to do both well.

Meta’s ability to drive revenue

Facebook and Instagram Reels are two of many products under the Meta umbrella. But Meta’s strength on its social networks is its ability to monetize.

Sometimes those ads are too aggressive, especially on Instagram, but they can potentially lead to higher ROI than either TikTok or Shorts.

In the episode, instead of picking a “winner,” we asked a three-part question. Which company adds the most value for:

• Artists and creators?
• The music industry?
• Its parent company?

We decided that TikTok was most valuable to artists and creators given its massive reach and cultural cache. YouTube Shorts is the one that’s most valuable to music since strong agreements are in place, and YouTube is proud of the billions it pays to the industry. And we concluded with Reels being most valuable for its parent company.

In the rest of the episode, we discussed:

• active vs passive listening and watching
• will there be a new dominant platform in 5 years
• potential strengths and pitfalls for each company

Listen to the full episode here:

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money moves

• Sub Saharan Africa’s recorded music revenue grew 34.7% in new IFPI report​
• Bloomberg says that Spotify has spent less than 10% of its $100M diversity fund​
• What a TikTok ban would mean for the music biz

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coming soon from Trapital

Podcast: the music rights draft! We’re gonna go back and forth and draft the top seven artist’s music rights we would most want to acquire. Drops next Thursday!

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