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It should be widely known by now, but it bears repeating: when social media companies sign music licensing deals covering user-generated content, those users do NOT include brands. If a brand wants to use commercial music in one of its social media campaigns, it needs to license it properly as a sync.

Drinks brand Bang Energy has learned this with a US judge ruling it liable for copyright infringement after using a number of Universal Music Group tracks in its TikTok ads. The company had argued that it thought it was covered by TikTok’s licensing deals with the label group.

Judge William P Dimitrouleas ruled that while this may be relevant to any damages bill later, it does not affect the question of liability. Sony Music had also sued Bang Energy over use of its music in the company’s TikTok ads, with that case still pending.

Billboard reported that Bang Energy may now be “on the hook for millions in damages”, but the case isn’t an entirely clear-cut verdict on copyright infringement in branded content on social media platforms. The judge ruled in the brand’s favour on another aspect of UMG’s lawsuit: use of its music by TikTok influencers who were part of Bang Energy’s campaigns.

The ruling here was that UMG had not proved that Bang Energy had control over those TikTokers’ videos, even though the label had argued that the company had audited the clips, music included, before publication.

To a layperson, the principles seem clear enough: when an influencer is making their own videos, they’re covered by a platform like TikTok’s music licences. But if they’re being paid by a brand to make sponsored content, it’s a sync and the music needs to be licensed as such. However, legally there is still a degree of murk around this question.

What we can say is that TikTok certainly sees this as a problem to be solved, and indeed a commercial opportunity. In October 2021 it launched its ‘Sound Partners’ program with a library of pre-cleared production and commercial music for brands to use. We reported recently on its expansion of that catalogue via a deal with licensing firm Marmoset’s ‘Track Club’ offshoot.

“I do think there’s a massive, massive opportunity here,” TikTok’s music boss Ole Obermann said last November. “We’ve done some back of the envelope math where we look across all of the smaller business accounts and commercial accounts we have on TikTok who are wanting to use music in the videos that they post. And if you run the numbers on that, I think we could make this a billion or even multi-billion dollar business in a very short period of time.”

“Pre-cleared or auction marketplace, there are a few things we’re working on there. I’m really bullish actually that we will get to a point where we can help unlock a lot of additional value based on commercial use of music in the future.”

This may be a multi-billion dollar opportunity for TikTok, but the Bang Energy case is a reminder that using commercial tracks without the correct licence can also be a millions-of-dollars damages headache for brands – although we’ll see whether Bang Energy’s arguments that it thought it was covered keeps its final bill down.

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