Music is at the heart of TikTok and other short video apps. It is not just the video platforms that are reaping the fruits of their growing popularity. Music rights holders are also poised to make money out of the millions of songs contained in snappy, user-created videos.
To identify copyrighted content, record labels and publishers are turning to a technology called audio fingerprinting, a tool developed by Shazam, an Apple company. ACRCloud, a five-year-old startup based in Beijing and Düsseldorf, is competing for this service with companies like Audible Magic and Gracenote from Nielsen. It can quickly match the "fingerprint" or ID of a target song – important acoustic characteristics like the tempo and notes of a piece – against a reference database of millions of tracks.
ACRCloud helps monitor copyright usage for some of the largest music labels in the west, whose names the company cannot disclose as the partnerships are confidential. The record labels use the startup's automated content detection algorithms (hence the name ACRCloud) to monitor works present on radio and television programs, user-generated content on platforms like YouTube and TikTok, or the service that is supposed to pay copyright holders.
It's not just publishers and labels who keep an eye on their intellectual property. For compliance reasons, broadcasters and UGC services also proactively track music played through their channels.
In the emerging short video industry, large labels typically charge an astronomical flat fee from UGC platforms, said Tony Li, co-founder of ACRCloud, and the rate is often disproportionately higher than the cost of actual usage. To cut costs, several large Chinese short video apps recently used ACRCloud's acoustic algorithms to keep a log of what tunes users put into their videos.
On the other hand, many small copyright owners and labels hardly earn license fees because they lack a system with which music usage can be automatically assigned to license fees.
The identification of content can play a role here. "UGC platforms use an audio fingerprint service to generate royalty reports, making music usage more transparent for both UGC platforms and rights holders," Li told theinformationsuperhighway.
UGC services can face heavy fines if they are found to be plagiarism. Earlier this year, a group of music publishers and songwriters reportedly threatened to sue TikTok for copyright infringement. Unsurprisingly, TikTok's parent company ByteDance is doubling down on music licensing and is even developing its own artists to be less dependent on big labels.
The other obvious use case of acoustic fingerprinting is song recognition, a technology developed by Shazam that Li worked on from 2012 to 2014 to help the company expand into China. Phone manufacturers like Huawei, Xiaomi and Vivo have built ACRCloud's music recognition technology into their devices.
Li has always been in the field of audio technology. In addition to his time at Shazam in China, the entrepreneur was previously involved in Huawei's ringtone business in African markets. Li never raised external funds for ACRCloud and kept the team small with only 10 employees.