Warner Music, TikTok sign expanded licensing agreement
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WARNER Music Group and TikTok announced a wide-ranging partnership, giving the popular video app access to the music giant’s repertoire and creating potential new revenue opportunities for artists and songwriters.
The deal announced on Tuesday (Jul 18) will expand the level of partnership between the two, harnessing TikTok’s revenue generation and promotion capabilities and deepening artists’ engagement with the social media company’s huge audience of passionate music fans, the companies said in a statement.
The companies also agreed to a licensing deal for TikTok Music, a subscription streaming service that recently launched in Indonesia and Brazil, with plans for further expansion in other markets. TikTok, which has more than a billion users around the world, is owned by ByteDance.
As TikTok has grown in popularity, it has become one of the music industry’s most powerful kingmakers and has started to profit from its popularity. Record labels have been pushing the social media giant to give them a greater share of revenue generated from the advertisements that run alongside user-created music videos like dance performances. Earlier this year TikTok ran a test in Australia where it limited the amount of music that creators could access to help determine how important the songs are to overall traffic on the app.
Warner Music shares rose 2.7 per cent to US$30.31 as of 10.48 am in New York. Both sides declared themselves happy with the new agreement.
“Through this expanded and significantly improved partnership for both companies, we can jointly deliver greater value to WMG’s artists and songwriters and TikTok’s users,” Warner Music’s chief executive officer Robert Kyncl said in the statement.
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The deal is expected to encourage other big labels Universal Music Group and Sony Group to come to terms with TikTok. BLOOMBERG
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