“We looked at this question [of committing to working with music rightsholders] very closely at YouTube and decided that it was important to us… TikTok needs to do that; it’s the right decision for them to evaluate.”
Robert Kyncl knows all about tense stand-offs with the music rights business – and how to fix them.
He was, after all, Chief Business Officer at YouTube, where he worked for 12 years until the top of 2023, when he became Chief Executive of Warner Music Group (WMG).
Via the above quote, delivered on a WMG earnings call in February, Kyncl nodded to YouTube’s one-time reputation as the bête noire of major record companies… and how the Alphabet-owned video service ultimately improved its reputation with (and, coincidentally, the amount it pays) the record business.
Today (July 18), Kyncl, alongside TikTok CEO, Shou Zi Chew, have made a major joint announcement that hints at a new day for dealings between major music companies and the ByteDance-owned app: A fresh, multi-year licensing agreement between WMG and TikTok that both sides dub a “first of its kind” pact.
What does that mean?
In a joint press release, TikTok and Warner clarify that the new “multi-year, multi-product” deal will see WMG license the repertoire of Warner Recorded Music and Warner Chappell Music to TikTok and TikTok Music, plus ByteDance-owned video editing platform CapCut, as well as TikTok’s Commercial Music Library.
(That’s the Commercial Music Library which enables brands to near-enough-instantaneously license music for ad syncs on TikTok, which TikTok’s global music boss, Ole Obermann, has suggested could ultimately multiply the size of music’s worldwide sync market.)
The PR goes on to clarify that the new deal will enable “WMG and TikTok [to] find new ways to harness TikTok’s revenue generation and promotional capabilities”, as well as facilitating “new fandom development and monetization features, like merchandise, ticketing, and digital goods and services, among other opportunities”.
“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.”
Shou Chew, TikTok
Perhaps the most intriguing line in the press release jointly issued by WMG and TikTok today?
“[T]he deal will see the joint development of additional and alternative economic models.”
What could that mean? There are a few possibilities.
Has Robert Kyncl (and his WMG team) negotiated a more sophisticated payment structure for TikTok licensing than the one-shot ‘lump sum’ / blanket license agreements we’ve seen Warner and other majors agree to in the past?
Or might those “additional and alternative economic models” have more to do with TikTok Music – the all-new music subscription app that TikTok just launched in Indonesia and Brazil (effectively replacing Resso)?
That’s for deeper discussion another day.
For now, the facts: Following a fairly tempestuous recent behind-the-scenes relationship between major music companies and TikTok (including that Australia experiment), TikTok and the world’s third largest major music company are – today, at least – bosom buddies again.
Robert Kyncl, CEO, WMG said: “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.”
Shou Chew, CEO of TikTok, said: “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.”
Music Business Worldwide