TikTok’s imminent renewal of its licensing deals with major labels have been the talk of the industry for months now, as labels pressed for higher payments from the rapidly-growing social app.
Now it has nailed one of those renewals: with Warner Music Group. The two companies announced a “wide-ranging, first-of-its-kind partnership” this afternoon, described as an expansion of their previous agreement.
The new deal covers WMG’s recorded music and publishing divisions, and will license their catalogues to TikTok and its new TikTok Music sister service – but also to ByteDance’s popular video-editing app CapCut, and to TikTok’s brand-focused Commercial Music Library (CML).
The latter is one of the interesting aspects of the new agreement. Brands have been sued by major labels for using commercial music in their social videos without sync licences. The CML is TikTok’s attempt to provide a library of legal, licensed tracks, and so far it’s been mainly about independent artists. WMG’s catalogue is a significant addition.
Unsurprisingly, the details of the new deal – particularly how its payouts work – has not been announced.
Previous rumours suggested that the majors were looking for a share of TikTok’s advertising revenues, but it’s unclear whether that’s part of WMG’s deal. We’d expect leaks to clarify that in due course.
Officially, it will “expand the level of partnership, collaboration, and innovation between the two companies” including “new revenue, marketing, and insights opportunities for WMG’s artists and songwriters”.
There are some more lines to read between, though.
“As part of the deal, Warner Music Group and TikTok will find new ways to harness TikTok’s revenue generation and promotional capabilities, as well as a wealth of insights,” announced the companies.
“In addition, artists and songwriters will have access to new ways of working with TikTok’s vibrant brand partners, as well as to new fandom development and monetization features, like merchandise, ticketing, and digital goods and services, among other opportunities.”
But here’s the good bit: “Further, the deal will see the joint development of additional and alternative economic models.”
WMG’s rival Universal Music Group has been talking a lot this year about its desire to develop new economic models with streaming services. WMG appears to have a similar ambition with the world’s buzziest social-media app.
“We are happy and excited for our next chapter together with TikTok. 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,” said WMG CEO Robert Kyncl.
“We are very excited to partner with Warner Music Group to create a shared vision for the future in which artists, songwriters, music fans and the industry can all benefit from the power of discovery on TikTok platforms,” added TikTok CEO Shou Chew.