TikTok signs licensing deal with music rights agency Merlin for indie label music in videos and, source says, in its upcoming music streaming service, Resso
TikTok, the fast-growing user-generated video app from China's Bytedance, has been building a new music streaming service to compete …
Context & Ripple Effects
ByteDance's music ambitions have been public for months: sources reported in May 2019 that it was building a paid music app aimed at emerging markets, followed by reports of talks with record companies for a streaming launch in Brazil, India, and Indonesia. The Merlin deal is the first concrete catalog commitment to surface — and the first to tie TikTok's video feed directly to a future streaming product, Resso.
The significance is leverage: Merlin represents thousands of independent labels, so ByteDance secures a large slice of catalog without needing every major label signed first. That matters for a service whose later trajectory — SoundOn distribution and eventually cutting label-facing jobs to work directly with artists — points toward reducing dependence on traditional label intermediaries.
First-order effects
- Merlin's independent label members gain licensed placement in TikTok videos and, per the source, a launch catalog in Resso — new revenue and discovery channels without negotiating with ByteDance individually.
- Resso's catalog position at launch strengthens: indie content fills gaps while ByteDance's negotiations with major labels, first reported months ago, continue.
Second-order effects
- The major labels lose some negotiating leverage: with indie catalog licensed, ByteDance can launch a credible streaming service without a full majors lineup, weakening the majors' ability to hold out for premium terms.
- Competing streaming services face a rival whose catalog is subsidized by the world's largest short-video audience — TikTok videos become a funnel into Resso subscriptions in ways pure streaming players cannot replicate.
Third-order effects
- If the pattern holds — license first via Merlin, then build direct-artist tools like SoundOn, then shrink label-facing teams — the label's traditional role as gatekeeper between artists and distribution erodes, with platforms like ByteDance absorbing that function.
- Emerging markets become the testing ground for a new streaming structure, as ByteDance's reported launch markets (Brazil, India, Indonesia) let it build the licensing-to-distribution pipeline where incumbent streaming penetration is thinner.
The trend: Music streaming is shifting from label-mediated licensing toward platforms that license catalog first, then build direct artist relationships to bypass the labels they once needed.