TikTok Now Has Short-Term Licensing Deals With the Major Labels

#TikTok has struck short-term licensing deals with Universal Music Group, Sony Music & Warner Music Group

4/1/2020 5:00:00 AM

TikTok has struck short-term licensing deals with Universal Music Group, Sony Music & Warner Music Group

TikTok has struck short-term licensing deals with Universal Music Group, Sony Music and Warner Music Group, multiple sources tell Billboard.

chart, it was also in the unusual position of renegotiating with all the major labels at about the same time.While those parties have come to agreements for the time being, TikTok’s business model is still a key concern: labels want the company to find ways to offer more value for music rights holders. The company generates revenue through in-app purchases and advertising, but most of its revenue has been generated in China,

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accordingto analytics firm Sensor Tower. TikTok pulled in over $176 million in revenue in 2019, according to Sensor Tower, with China-based iOS users spending $122.9 million compared to only $36 million coming from U.S.-based users. TikTok does not release revenue information. In comparison, Twitter, which has 152 million daily active users pulled in $3.46 billion in revenue in 2019.

These deals are separate from the agreements labels have struck with Bytedance’s streaming service, Resso, whichlaunched in India earlier this month. Resso has deals in place with Sony and WMG, but not UMG -- the world’s largest record company. Unlike traditional streaming services like Spotify and Apple Music, Resso is more social. It allows users to comment on songs, and focuses more on lyrics, which automatically show up when a song is playing and can be shared between users. headtopics.com

On the publishing side, TikTok has deals with the major publishers owned by UMG, Sony and WMG, as well as more than 8,000 independent publishers administered through Music Reports, the company confirmed to Billboard, but sources say many of those deals were passed down from the Musical.ly acquisition.

As well as Kobalt and BMG, other publishers with deals include eOne and Secretly Publishing. Pulse Music also has a deal but its expiration date is “rapidly approaching,” according to a source. Still, TikTok does not have deals in place with a number of the biggest independent music publishers, including Big Machine and Big Deal Music, and some

publishers have accusedthe company of copyright infringement.“My understanding, based on input from several music publishers, is that there is a mass amount of music on TikTok that is not properly licensed,” National Music Publishers' Association CEO

David IsrealitetellsBillboard. “I understand that they may have some licenses with some music publishers, but it seems clear that they are using music well beyond the licenses that they have, which is completely unacceptable.”For unlicensed music, TikTok deals with user-uploaded music under the Digital Millennium Copyright Act’s “safe harbor” protection, which requires it to promptly respond to takedown requests from rightsholders. headtopics.com

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