TikTok Strikes Short-Term Licensing Deals With Sony, Warner, Universal (Report)

TikTok has secured shorter-than-usual licensing deals with three of the music industry’s biggest publishers: Universal Music Group, Warner Music Group, and Sony Music.

The shortform lip-syncing app has been embraced by many U.S.-based users as a kind of Vine 2.0, a repository for comedy sketches and memes. But at its core, TikTok is built for music. It offers creators a vast library of 15-second song clips to use in their videos, and generally pays royalties to artists whose tracks are used.

To use those songs and pay those royalties, though, it needs to have licensing agreements in place. TikTok has more than 8,000 licensing deals, most of them inherited from the absorption of its former competitor Musical.ly, sources familiar with the matter told Billboard. TikTok’s parent company Bytedance bought Musical.ly for $800 million in 2017, merged the two in August 2018, and since then, has been licensing music by extending Musical.ly’s expired partnerships with record labels.

The Universal, Warner, and Sony deals appear to be the biggest agreements TikTok has struck itself. They give TikTok the right to have music from the publishers on its app, but only for a limited period of time. Sources didn’t specify, but told Billboard

that the deals are significantly shorter than the common 18- or 24-month agreements normally arranged between platforms and publishers.

And that truncated period, they said, is because of TikTok’s struggle to monetize content. The app has not set up a consistent moneymaking pathway for creators, and how much it pays music artists has long been a point of contention. Universal, Warner, and Sony reportedly want TikTok to figure out how to increase monetization before signing long-term agreements, so how the platform develops over the coming months will be apparently be a key factor in determining whether it obtains future licenses.

As Billboard notes, TikTok isn’t the only Bytedance app securing music licenses. The Chinese tech giant just launched a standalone music streamer, Resso, in India. For that app, it struck deals with Sony and Warner, plus Bollywood record label–and YouTube’s most-followed entity–T-Series.