There’s a standoff brewing between the music industry’s top labels and the wildly popular app TikTok.
According to Bloomberg, Universal Music, Warner Music, and Sony Music are demanding more money for their songs that are featured in TikTok and its Chinese version Douyin.
The deals between the labels and the app expire this spring, and negotiations have reached something of a stalemate. If they fail to come to an agreement, Bloomberg reports that the labels will pull their catalogs from TikTok, which will undoubtedly cripple the app.
Whether users are making memes, lip-synching, or dancing, TikTok’s driving factor is the music that’s played during its short video clips. However, ByteDance, the parent company of TikTok, doesn’t view itself as a music streaming service and therefore shouldn’t be treated as one.
“TikTok is for short video creation and viewing and is simply not a product for pure music consumption that requires a label’s entire collection,” said Todd Schefflin, senior manager of music partnerships at ByteDance, in an interview with Bloomberg. “The platform provides an exciting way for content to trend and break through to wider audiences.”
Rapper Lil Nas X’s controversial country song “Old Town Road” gained massive traction on TikTok as a meme and eventually landed the track on the No. 1 spot on Billboard.
ByteDance reputedly generated $7 billion in revenue in 2018 and is valued by investors at $75 billion but is not yet a profitable business.
The music labels know TikTok needs them. TikTok knows it has a track record of making songs go viral. The question: How much is all of that worth to both sides?