China's ByteDance ventures into AI-generated music with Jukedeck deal

[July 24, 2019] SHANGHAI (Reuters) - China's ByteDance is venturing into artificial-intelligence (AI) generated music, hiring the staff of a London-based start-up after buying some of its intellectual property assets, according to LinkedIn posts and a person with knowledge of the matter.

The move could give one of the world's most valuable start-ups more options for the music used on its video-streaming apps TikTok and its Chinese version Douyin. Many videos on the service use popular songs whose rights are controlled by large record companies.

The person with direct knowledge of the matter said "several members" of the team at AI startup Jukedeck had joined ByteDance after the company acquired some of the Jukedeck's IP assets.

At least five employees of Jukedeck, including founder Ed Newton-Rex, have updated their LinkedIn profiles to say they started work at ByteDance's AI lab as early as April.

ByteDance, Newton-Rex and Jukedeck - whose website has been taken offline - did not immediately respond to requests for comment on Wednesday.

TikTok, which allows users to create and share short videos, has been downloaded more than 1 billion times globally, according to analytics firm Sensor Tower, and its popularity has helped ByteDance to a potential valuation of around $75 billion.

Its videos rely heavily on music, with users often setting comedy antics and dancing moves to popular tunes. Videos can be removed if the music is reported for copyright infringement.

Matthew Brennan, founder of tech consultancy China Channel, said while TikTok and Douyin were evolving to include longer-form video content similar to that available on other platforms like Alphabet Inc's YouTube, music was central to its user experience.

"Over time, music for TikTok will become less important but certainly today it's very important," he said.

Bloomberg reported in April that Universal Music, Sony Music and Warner Music have demanded more money for songs played on TikTok and Douyin.

Jukedeck, whose software allows users to use AI to make music for royalty-free use on online videos, has raised at least 2 million pounds ($2.49 million) from investors such as Cambridge Innovation Capital (CIC), according to CIC's website.

Music industry consultancy Music Ally, which was the first to report the shift of Jukedeck's staff to ByteDance, said the British firm was one of the world's leading AI-generated-music experts.

(Reporting by Brenda Goh; Editing by Christopher Cushing)

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