Sony, Universal Music, Warner Music ask TikTok to share ad sales, boost royalties: report
5./15 WEST

Universal Music (OTCPK:UMGNF), Sony Music (NYSE:SONY) and Warner Music Group (NASDAQ:WMG) have asked TikTok, owned by China's ByteDance (BDNCE), to share its advertising revenue and boost the royalty payouts for their music libraries as the social network continues to explode in popularity, Bloomberg reported.
The news outlet, citing people familiar with the talks, noted that negotiations have been ongoing throughout 2022 and are seeking a deal before existing contracts expire in the next several months.
According to research firm eMarketer, TikTok generated $4B in revenue in 2021 and could hit more than $11B this year. It has over 1B monthly active users and is one of the most downloaded apps on the App Store and Google Play Store.
The music companies want to be compensated by on the number of plays their artists get, with TikTok paying anywhere between two and ten times more than the original agreement and in-line with other platforms, including Google's (GOOG) YouTube and Meta Platforms (META) Facebook.
ByteDance (BDNCE) has an existing music service known as Resso that is active in Indonesia, Brazil and India. Bloomberg added that the service has tens of millions of monthly active users in those markets, but the vast majority of them do not pay for the service.
ByteDance (BDNCE) has discussed plans to potentially rebrand Resso into TikTok Music, which it has registered a trademark for.
The company has plans to expand Resso into other markets but music rights holders have had issues with that, with Sony (SONY) removing its music from Resso earlier this year. 
Earlier this month, a Republican commissioner on the FCC argued the U.S. should ban TikTok (BDNCE) in reaction to recent reports about how U.S. user data is handled.