Two years ago, we asked if TikTok was slowly turning into a record company.
The ByteDance-owned platform had very recently entered the music distribution market with its SoundOn service, and was hiring for A&R execs with record label experience.
Today (June 18) MBW can reveal that TikTok is taking this evolution to the next stage – with a plan to acquire and invest in music rights.
We’ve learned that TikTok is forming an in-house Music Content Investment Team based in Los Angeles, New York, and San Jose, focusing on “partnership or acquisition opportunities in the music content space on a global level”.
In other words, TikTok is moving into the competitive music M&A market.
Tellingly, it’s looking to the world of investment banking and private equity to find the execs who will lead this charge.
This information was revealed by TikTok in new job ads spotted by MBW today (June 18).
The ads appear to indicate that TikTok’s new investment team will seek to acquire copyrights, as well as investing in music companies.
The first of the two job roles that TikTok is hiring for in Los Angeles, New York, and San Jose is a Music Content Investment Manager.
“The TikTok Music Content Investment Team is a newly formed team that focuses on partnership or acquisition opportunities in the music content space on a global level. The team will work with TikTok music content strategy team and operations teams in evaluating market opportunities, executing partnership or acquisition projects, performing detailed financial analysis and valuations of music content and related assets that would helping shape the future of TikTok music businesses.”
Tiktok job ad
According to the ad, the successful candidate will be required to “develop and implement investment strategies for acquiring and managing music content”.
Applicants will need at least three years’ experience at a reputable investment bank, management consulting firm, or private equity firm.
The ad says the person hired for the role will need to “evaluate [TikTok’s] music content acquisition strategy by conducting rigorous industry research, closely monitoring ongoing music investment landscape, and presenting relevant analyses and insights with actionable recommendations to senior management.”
TikTok says the successful candidate will “help shape the future of TikTok music businesses”.
The second job ad we’ve spotted is for a more senior Music Content Investment Lead.
TikTok is hiring for the role in Los Angeles and San Jose. This person will “formulate and implement investment strategies aligned with TikTok’s objectives in music content operations”.
According to TikTok’s recruitment ad, they will also be required to oversee “the preparation of financial valuation models for target companies in the wider music ecosystem, including market size and growth assessment, financial projection, and synergies evaluation”.
“[The candidate will] Evaluate music content acquisition strategy by conducting rigorous industry research, closely monitoring ongoing music investment landscape, and presenting relevant analysis and insights with actionable recommendations to senior management.”
Tiktok job ad
To fill this role, TikTok is looking for an individual with a Bachelor’s or Master’s degree in Finance, Economics, or relevant fields, plus at least five years’ experience at a reputable investment bank, management consulting firm, or private equity firm.
Strong corporate finance knowledge and valuation modeling skills are also required.
Other preferred qualifications for TikTok’s Music Content Investment Lead role include “familiarity with global music content, including artists, tracks, trends, asset valuation, trend drivers, etc.”
A knowledge of digital music distribution and music industry trends across all genres is also required.
According to the description in both ads, TikTok’s new team will work with the platform’s music content strategy team and operations teams in “evaluating market opportunities, executing partnership or acquisition projects, performing detailed financial analysis and valuations of music content and related assets that would helping shape the future of TikTok music businesses”.
What does this news mean for the music rights industry?
TikTok’s intent to invest in music content and companies is likely to be regarded with some concern by major music rightsholders.
A potential strategy behind the move is an evolution of TikTok’s SoundOn service, which distributes indie artists both on TikTok and on other services.
TikTok may be seeking a bigger piece of the music recorded by the artists that SoundOn helps develop – especially if SoundOn is seeing these artists regularly go viral… and then sign to major record companies.
For example, TikTok could offer a rising independent act a deal for a stake in (or full ownership of) their catalog way before any of the majors get a chance, effectively cutting off the funnel.
And once TikTok invests in an artist’s music? What would stop the platform from prioritizing the promotion of its owned content?
Obviously a careful balance would need to be struck there vs. TikTok’s promotion of major label-signed music… in order to avoid the kind of public fallout we saw between TikTok and Universal Music Group earlier this year.
Another possibility: Vintage catalog tracks often go viral on TikTok – and sometimes it’s not always the most obvious/famous copyrights that do so.
Might TikTok be moving towards an M&A strategy to acquire relatively unpopular back catalog that has – or will in the future – blow up on its service?
A final thought: If TikTok does start acquiring music copyrights (or at least long-term licenses of music rights), could it set a precedent whereby other competing platforms like Google-owned YouTube and Meta-owned Instagram start thinking about doing the same thing?
Secondly, we have to point out that technology giants acquiring music tech startups and hiring their teams to help build out their capabilities is nothing new.
Over the years, we’ve seen the likes of Apple (see Shazam) and Spotify (see Sonantic) splash cash on startups that have since been integrated into their own platforms.
Yet the question everyone will be asking today: What kind of companies exactly will TikTok’s new team be looking to invest in?
Between the generative AI boom and TikTok’s own extensive research in the gen AI space, could it be planning to acquire an AI-related startup to accelerate its ambitions in this field?Music Business Worldwide