Guggenheim notes that Warner Music Group and TikTok – owned by ByteDance – announced an expanded, “first-of-its-kind” partnership that will bolster the level of collaboration and innovation between the two companies. The firm notes several key takeaways from the announcement including TikTok’s ability to reach expanded agreements even as it tackles broader business challenges, TikTok’s interest in using licensed music content to fuel platform growth, Warner Music’s and CEO Robert Kyncl’s leadership position in establishing an expanded deal with an important digital distribution partner, and indication of expanded monetization opportunities. Guggenheim views the announcement as supporting its confidence that collaboration between platforms and labels will be a value-creating win/win for all stakeholders. The firm has a Buy rating on Warner Music’s shares with a price target of $36.
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