Under Pressure From U.S. And Facebook, TikTok Signs Music Distribution Deal For Its Creators

TOPLINE

TikTok announced its first music distribution partnership Monday as the social media app’s China-based parent company ByteDance moves forward with American deals, despite facing pressure from the Trump administration to sell TikTok’s U.S. operations by September 15 to avoid being shut down. 

KEY FACTS

key background

Despite repeatedly denying claims it shares users’ data with the Chinese government, TikTok has faced mounting security and privacy concerns. President Trump signed an executive order on August 14 requiring ByteDance to divest TikTok’s American assets and any data gathered in the U.S. in 90 days. Trump wrote there is “credible evidence” that led him to believe ByteDance “might take action that threatens to impair the national security of the United States.” Trump’s executive order follows months of concern from Republican and Democratic senators who consider TikTok to be a threat to U.S. national security. 

what to watch for

Microsoft has confirmed it is talking to ByteDance about a potential deal and will make a decision by September 15. Microsoft said the companies are discussing a purchase of the TikTok service in the U.S., Canada, Australia and New Zealand which would result in Microsoft owning and operating TikTok in those markets. “This new structure would build on the experience TikTok users currently love, while adding world-class security, privacy, and digital safety protections,” Microsoft said in a statement. 

tangent

A recent bid reportedly valued TikTok at $50 billion, according to Reuters, 50 times its projected 2020 revenue of $1 billion. 

big number

45.4 million. That’s how many TikTok users there are in the U.S., according to Statista. The statistics firm estimates that the number could grow to 60.3 million by 2024.

further reading

Order Regarding the Acquisition of Musical.ly by ByteDance Ltd (Trump Administration)

TikTok announces deal with UnitedMasters, the first distributor to be fully integrated into the TikTok platform (TikTok)

Microsoft to continue discussions on potential TikTok purchase in the United States (Microsoft)

A Reported Takeover Bid Values TikTok At $50 Billion (Forbes)