The video streaming social networking app, TikTok which is owned by China-based software developer, Bytedance has entered a licensing deal with Merlin to launch a new music streaming service. The new music service would compete with the other existing music streaming services such as Spotify, Apple Music, and Amazon Music.
License Deal Between TikTok and Merlin
On Thursday, January 23, 2020, TikTok announced a licensing deal with Merlin for launching a new digital music service without disclosing the transaction amount involved in the deal. Merlin, a UK-based company, offers digital music services that represent tens of thousands of independent music labels.
This new project was important for TikTok as it was the first major licensing deal that would help to expand its operations in the music industry. According to Merlin’s officials, the deal represented a significant music partnership and the deal would grant TikTok to use every Merlin’s platform available around the world. As per TechCrunch, the deal also included TikTok’s access to Merlin’s upcoming music subscription service, Resso.
The much-awaited service, Resso was finally introduced at the end of 2019 and it was tested successfully in India and Indonesia. Earlier in last year, Bytedance had acquired Jukedeck, an artificial intelligent (AI) based music startup and the company’s latest owning of Resso would speed up its music market globally.
TikTok’s Global Head of music, Ole Obermann stated in a statement, “Independent artists and labels are such a crucial part of music creation and consumption on TikTok. We’re excited to partner with Merlin to bring their family of labels to the TikTok community. The breadth and diversity of the catalog present our users with an even larger canvas from which to create while giving independent artists the opportunity to connect with TikTok’s diverse community.”
Despite the Chinese-based video app, TikTok was among one of the most popular apps in 2019, the company had lagged in terms of revenues and profits earned from this app globally. As per the TechCrunch report, the deal would help in gearing up the company’s revenue.
TikTok’s Operations in the Music Industry
TikTok had been looking for expanding its operations in the music industry over some past years by forging partnership deals, restricting its board members, and expansion of its offices. Besides the latest partnership with Merlin, TikTok had yet to make public about the upcoming partnership deal with other companies.
As of December 2019, TikTok had dues to sign deals with giant music companies including Sony Music, Warner Music, and Universal Music. Meanwhile, Obermann, who was hired away from Warner Music last year, had able to obtain label licensing and led to hiring another former Warner colleague, Tracy Gardner. Last week, the company had opened its new office in Los Angeles.
As per TechCrunch, the deal has described two key important for TikTok that the partnership would generate revenues through short-form user-generated videos or advertising that runs alongside the new music service. The combined efforts of the two companies would expand their operations in the wider tech and media marketplace.
Following the deal, Jeremy Sirota, the CEO of Merlin, stated in a statement. “This partnership with TikTok is very significant for us. We are seeing a new generation of music services and a new era of music-related consumption, much of it driven by the global demand for independent music. Merlin members are increasingly using TikTok for their marketing campaigns, and today’s partnership ensures that they and their artists can also build new and incremental revenue streams.”
I’m Roshan, a journalist, blogger and music lover. I like covering global news related to finance, business, and technology. Focusing on the collection of true and reliable information, I rely on working by conducting interviews with business leaders and talking to the inside sources of companies.
You can reach out to me at: [email protected]