Tiktok's payola problem: who's being paid, for what?

The 1.7 million people who follow Maisie Smith, better known as Tiffany Butcher in EastEnders, on TikTok are confronted with a glamorous and quirky list of videos of the soap star preening and playing up for the camera. Many of those videos on the controversial short form video sharing app are played out to the sound of major pop songs, including by Japanese singer Joji and British pop stars Little Mix.

But Smith’s clowning about has landed her in hot water, and subject to a BBC investigation as to whether she has received money to promote the songs to her throngs of fans. Reports this weekend claimed Smith was offered “a huge sum” by a record label to integrate their stars’ songs into her videos, something her BBC contract forbids.

A BBC spokesperson says they’re looking into the allegations, and declined to comment further. But if Smith is receiving money to plug tracks without declaring a commercial interest, she wouldn’t be alone.

“Do I think it goes on? Of course I do,” says Nico Cary of Influentially, a talent agency representing some of the UK’s top TikTokers, who post short videos between 15 and 60 seconds long to an app used by millions worldwide.

The audiences are often young – leaked data reported on by The New York Times shows that 43 per cent of British users are under the age of 14, according to TikTok’s own analysis – and so a ripe audience for marketers looking to sell their wares.

The idea that music labels would pay for preferential treatment on TikTok won't be too surprising to those with any knowledge of the history of the music industry. So-called "payola" - radio plays, paid for by record companies - has long been a way that buzzy stars gain a following by being broadcast to younger audiences. The use of the same practice on TikTok is nothing new - though the level of scrutiny, and the ability to get your music in front of so many people with so little oversight, perhaps is.

As the number of brand deals to plug holiday destinations and swimwear decline as we're all stuck indoors, non-physical products like music tracks are becoming a more important stream of revenue for online influencers. Smith's predicament is likely just the tip of the iceberg, with more creators engaged in advertising music as the stakes become higher, and making money becomes more difficult.

Cary and Influentially’s stars can receive between ￡500 and ￡2,500 for including a song in one of their videos, depending on their reach and their audience. The record labels will send influencers a briefing document outlining how they can and can’t use the song; the digital stars then create their videos and send it to brands for approval, before posting at an agreed time. “Normally they push it just before or as the song is dropped on Spotify to get more streams,” he says.

Influentially has a policy where every creator they represent has to declare they’ve been paid to promote a song, by appending the text “#ad” in the caption of the video. Cary claims that doing so is morally and legally right, even if he believes that TikTok’s algorithm, which decides what videos should be promoted to the app’s users, suppresses views on content tagged as advertising. “There’s no point trying to play the game,” he says. “It comes back to bite you eventually.”

Not declaring a monetary exchange would likely fall foul of advertising regulations, reckons Rupa Shah of #AD Consulting, who specialises in advising influencers how to keep on the right side of the law. Although the Advertising Standards Agency, the body in charge of enforcing the rules around advertising disclosure, haven’t yet made a ruling on the use of songs on TikTok, she believes the agency would likely consider music sponsorship in the same way as any kind of visual brand sponsorship – and therefore it would need to be declared. “You’re promoting a product,” she says. “It would have to be disclosed as a commercial relationship.”

The Advertising Standards Authority guidelines state that an advert is classed as something for which an influencer has been paid, and over which the company paying them has some form of editorial control over the content, including final approval.

“Although it’s not illegal for brands to pay people to promote their products in blogs, vlogs, tweets or other online articles – consumers need to know the endorsement has been ‘paid for’. If this isn’t clear, your post risks breaking the law,” the guidelines state.

TikTok itself insists none of this is any of its business: "Many creators negotiate deals with brands or record labels to promote a product or music in their TikTok videos," the company said in a statement. "In many cases TikTok doesn’t have sight of these deals and any commercial terms remain confidential between the creator and the advertiser."

The latest argument over music echoes similar disputes 18 months ago around Instagram influencers – many of them reality TV stars – who were also alleged to play fast and loose with the rules around disclosure of payment for promoting products.

The issue came to a head in the Netflix documentary Fyre: The Greatest Party That Never Happened, which outlined how dozens of influencers were paid to promote a festival that ended up a damp squib, many without disclosing the arrangement. “It’s a tenet of the advertising codes, which have been around for a very long time: advertising should look like advertising, and consumers should not represent themselves as consumers if they are in fact promoting a product,” says Shah.

The reasons behind that should be obvious: “As a consumer you should understand what their incentive is for it,” says Shah. “It might make a difference to whether you go ahead and purchase an album, which you might not have done. It’s about transparency and clarity.” However, the disclosure of paid promotional music use is far from clear and transparent.

A number of websites exist that promise to promote music to massive audiences through their TikTok stars. One service offers to act as a broker between record labels and TikTokers. “The music is pushed to the influencers’ highly engaged audiences through a piece of their organic content, resulting in highly-engaged click-throughs,” the company claims.

Though there is no suggestion that the company is engaged in anything that would go against advertising regulations, the company never makes clear whether the videos would be flagged as an advert. Reaching one million TikTok users costs $350, and the company’s website claims to have worked with the likes of Warner Records, Sony Music, Universal Music Group and Live Nation.

Another company that helps seed songs on TikTok, working with major record labels, charges a minimum of $50,000 for companies to promote their songs through a range of high-profile users on the app.

Shah worries the practice of using music, receiving money to do so, and not declaring that to viewers has been normalised. “We might be at a point where we’re almost taking it for granted that it is acceptable,” she says – similar to the situation we faced 18 months ago with Fyre and Instagram. Yet Shah is still hopeful. “We were at that stage with Instagram, and we turned it around,” she adds.