The future of music

Dispute brews between music giant and TikTok over artist compensation and technology

January 31, 2024
Source: LinkedIn

Key takeaways

  • On Wednesday, Universal Music Group announced that it will no longer be licensing its music to TikTok. The company also accused the giant of short videos of intimidating and bullying them during contract negotiations.
  • In response, TikTok said that UMG had prioritized “their own greed above the interests of their artists and songwriters.”
  • TikTok was accused by UMG, the agency that manages celebrities like Drake and Taylor Swift, of trying to establish a music-related business “without paying fair value for the music.”

The global music powerhouse Universal Music Group, which is home to many well-known musicians such as Taylor Swift, Elton John, Bob Dylan, Billie Eilish, and others, has accused the Chinese social network TikTok of abusing its market dominance by promoting music generated by artificial intelligence (AI).

The contract permitting TikTok to use Universal’s music catalog expires on January 31. Still, negotiations have broken down over three issues: “appropriate compensation for our artists and songwriters, protecting human artists from the harmful effects of AI, and online safety for TikTok’s users,” according to an open letter published on Tuesday and titled “Why We Must Call Time Out on TikTok.”

According to Universal, TikTok has agreed to pay “a rate that is a fraction of the rate that similarly situated major social platforms pay.”

Additionally, according to the multinational, TikTok is allowing AI-generated music on its platform, constructing tools to enable users to create it, and requesting “a contractual right which would allow this content to massively dilute the royalty pool for human artists, in a move that is nothing short of sponsoring artist replacement by AI.”

Furthermore, TikTok fails to handle “content adjacency issues appropriately, let alone the tidal wave of hate speech, bigotry, bullying and harassment on the platform,” or police sexually explicit deep fakes or posts that Universal claims “infringe our artists’ music.”

Put another way, hatemongers will hate, but Universal would prefer that Shake It Off not be the theme music for offensive videos. 

Universal asserted that it engaged in fruitful discussions and attempted to resolve these issues with other social networks. However, TikTok reacted to it with “indifference, and then with intimidation.”

The latter was demonstrated by a meek offer to license Universal’s content and by eliminating music by artists that Universal refers to as “developing artists” but leaving major artists available.

“When we proposed that TikTok takes similar steps as our other platform partners to try to address these issues, it responded with indifference and then with intimidation,” UMG said.

“As our negotiations continued, TikTok attempted to bully us into accepting a deal worth less than the previous deal, far less than fair market value and not reflective of their exponential growth. How did it try to intimidate us?  By selectively removing the music of certain of our developing artists, while keeping on the platform our audience-driving global stars.”

Universal Music Publishing Group and all music distributed and managed by UMG’s recorded music division would be impacted if the company decided to remove its catalog. Megastars like Lady Gaga, Lana Del Rey, Justin Bieber, Nicki Minaj, Eminem, Drake, Ariana Grande, Post Malone, BTS, and Taylor Swift are among the company’s cast members.

TikTok charges UMG with artist ‘greed’

On Wednesday, TikTok addressed the accusations made by UMG.

“It is sad and disappointing that Universal Music Group has put their greed above the interests of their artists and songwriters,” the platform stated.

“Despite Universal’s false narrative and rhetoric, they have chosen to walk away from the powerful support of a platform with well over a billion users that serves as a free promotional and discovery vehicle for their talent.”

According to TikTok, it has successfully negotiated “artist-first agreements with every other label and publisher.”

Warner Music Group and the company inked a music licensing agreement last year.

On February 8, 2021, UMG announced the conclusion of its most recent agreement with TikTok to license and publish its recorded music. WMG and TikTok signed a multi-year licensing agreement in July that permits the use of WMG’s music on the app CapCut and TikTok Music, a new “social streaming platform” that is presently accessible in Brazil, Indonesia, Australia, Singapore, and Mexico. WMG CEO and chairman Robert Kyncl and TikTok CEO Shou Chew stated when the deal was first announced that artists would benefit from it.

The music industry has experienced problems with TikTok before. The National Music Publishers’ Association (NMPA) urged Congress to look into TikTok for possible copyright theft in 2019 when the platform was only getting started. Around that time, it was also revealed that TikTok was using grandfathered-in deal extensions that had expired from when it had acquired in late 2017. Billboard revealed in March 2020 that TikTok had signed short-term licensing agreements with all three majors.

Tobi Opeyemi Amure

Tobi started as a crypto writer in 2017 and became a key crypto news editor and SEO specialist at Watcher Guru in 2021, significantly boosting their traffic. He enjoys Afrobeats, R&B, and Soul music in his spare time.

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