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Warner Music announces new deal with TikTok, as TikTok Music arrives in three more markets
By Chris Cooke | Published on Wednesday 19 July 2023
After much chatter of late about the ongoing licensing negotiations between TikTok and the major record labels, Warner Music yesterday announced a new deal with the social media company – a “first-of-its-kind partnership” no less. That announcement came as TikTok’s new standalone music service went live in three more countries.
The new deal involves both the Warner Music record company and music publishing business Warner Chappell, and covers various platforms run by TikTok owner Bytedance. That includes the main TikTok app and the recently launched TikTok Music, as well as video editing app CapCut and the social media firm’s Commercial Music Library.
In their announcement, Warner and TikTok also say that they will work together to “create new revenue, marketing, and insights opportunities for [the major’s] artists and songwriters” as well as “deepening the engagement with TikTok’s huge audience of passionate music fans”, while also developing “additional and alternative economic models”. Which all sounds like fun.
Although the music industry has had licensing deals in place with TikTok for some time, there has been increased criticism in the last year about how much money the digital firm is paying over to the music community.
A 2022 report from the International Federation Of The Phonographic Industry reckoned that as much music is consumed on social media platforms as on streaming services like Spotify. However, the streaming services pay significantly more into the music industry each year.
And aside from how much money is generated in total, the structure of the music industry’s deals with social media companies is often different than with Spotify et al. The latter operate on a revenue share model, whereas the likes of Meta and TikTok initially negotiated lump sum deals, where they pay a set fee per year oblivious of how much music is actually used.
With those social media firms’ own revenues booming, some in the music industry have been seeking to get revenue share arrangements with them too. Although, as music is only one part of what those platforms do, figuring out how a revenue share model might work is more challenging.
All of this put a lot of pressure on TikTok as it sought to negotiate its next round of licensing deals with the music industry. The marketing value of TikTok is also a factor of course, and Bytedance will have sought to exploit that in order to get a better deal.
Plus, it’s been known for some time that Bytedance planned to more closely integrate its standalone music service Resso with the TikTok app, and then roll that service out globally. That process began earlier this month when Resso basically relaunched as TikTok Music in Brazil and Indonesia.
As that service arrives in more countries, it will mean that the main TikTok platform is more overtly promoting a premium music service that pays money into the music industry more akin to Spotify.
YouTube did the same thing, of course, and that very much helped it improve its relationships with the music industry. So Bytedance’s plans for TikTok Music will have been a key part of the most recent round of deal-making too.
Obviously, those negotiations and the deals that come out the other end are always top secret, but whatever has been agreed with Warner Music will result in a “significantly improved partnership”, the major’s CEO Robert Kyncl declared yesterday.
“We are happy and excited for our next chapter together with TikTok”, says Kyncl. “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”.
Shou Chew, CEO of TikTok, adds: “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”.
So that all sounds just great. Although, there has also been criticism within the music-maker community about the total lack of transparency regarding the music industry’s past deals with TikTok. So it will be interesting to see how much Warner now tells its artists and songwriters about the “new opportunities” and “economic models” referenced in yesterday’s deal announcement, and exactly how they will generate royalties for music-makers.
Also, it is not yet clear quite how TikTok and TikTok Music will work together. The latter is likely to become a bigger talking point in the music community as it begins its global expansion. Last night it was announced that TikTok Music is now beta testing in Mexico, Australia and Singapore, meaning the new service is now operating beyond the markets where Resso already existed.
“TikTok Music is a new kind of music service that combines the power of music discovery on TikTok with a music streaming service offering millions of tracks from thousands of artists”, a TikTok spokesperson stated. “We are now beta testing TikTok Music in Australia, Mexico [and] Singapore, and will have more news to share on the launch of TikTok Music in the coming months”.
