Universal Music Cuts Licensing Deal With Video-Sharing Social App Lomotif

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After wasting much of the internet age losing a never-ending game of Whack-A-Mole against copyright infringers, Universal Music is dropping the walls around its vault of music — and getting paid to do so.

This week, Universal struck a licensing deal with Singapore-based TikTok rival Lomotif, lending users of the DIY music video app access to thousands of songs by the U.S. label’s most popular artists, including Drake, Billie Eilish, and Taylor Swift.

New Solution To An Old Problem

Now that a viral dance video can rocket a song to the top of the Billboard charts, the dinosaurs of the music business are starting to appreciate the power of social media. Instead of targeting a small-time Youtuber for unauthorized use of an Ariana Grande track, Universal Music is now striking licensing agreements with social sharing apps including TikTok, Snapchat, and Triller for use of its catalog.

With an IPO planned for September, Universal is seeking revenue streams from all angles, so another licensing deal — this time with video-sharing app Lomotif — was a no-brainer. And while it might be a stretch to call any app a rival to the ultra-popular TikTok, the rise of Lomotif has been sensational:

  • According to the Financial Times, Lomotif has seen 225 million app downloads, with 31 million monthly active users across 200 different countries, and an eye-popping 300 million videos watched on the app every month.
  • In February, a group of investors including former MoviePass chairman Ted Farnsworth acquired an 80% controlling stake in Lomotif for roughly $125 million.

By inking more and more licensing deals, Universal gains access to a broadening army of potential amateur marketers and advertisers for its top artists, while cashing in on its catalog at the same time.

Royalties, Finally: While streaming and subscriptions amounted to half of the label’s $8.8 billion in operating revenues last year, Universal Music is eyeing broad new sources of royalty proceeds, with social media part of a larger strategy that also targets the gaming world and fitness apps like Peloton.