Universal Music Group, one of the largest music companies in the world, said it failed to reach new deal terms with TikTok. Universal Music disagreement was over issues including artist compensation and AI and that TikTok tried to “bully” UMG into a deal worth less than its previous pact. As such, Universal Music said it will no longer license content to the app.
Universal Music Group’s agreement with TikTok is set to expire in the next 24 hours. Some of the world’s most popular music including Taylor Swift, Harry Styles and newly viral hit Murder on the Dancefloor will be removed from TikTok’s library.
TikTok and Universal Music deal expiration
UMG said that its agreement with TikTok is set to expire on Jan. 31. “The companies have not agreed to terms for a new agreement and upon expiration of the current agreement, Universal Music Group, including Universal Music Publishing Group, will cease licensing content to TikTok and TikTok Music services,” the company said in a statement.
Artists on Universal Music Group labels include Taylor Swift, Bad Bunny, Sting, The Weeknd, Alicia Keys, SZA, Steve Lacy, Drake, Billie Eilish, Kendrick Lamar, Rosalía, Harry Styles, Ariana Grande, Justin Bieber, Adele, U2, Elton John, J Balvin, Brandi Carlile, Coldplay, Pearl Jam, Bob Dylan and Post Malone.
TikTok, owned by Chinese internet conglomerate ByteDance, is the massively popular short-form video app whose core features let users create and share videos using licensed music and other sounds.
UMG TikTok global deal
Three years ago, in February 2021, UMG touted a global agreement with TikTok that it said “delivers equitable compensation for recording artists and songwriters and significantly expands and enhances the companies’ existing relationship, promoting the development of new innovative experiences.”
Open letter by UMG
On Tuesday, UMG posted an open letter “to the artist and songwriter community” with the headline “Why We Must Call Time Out on TikTok.”
In a blistering open letter titled “Why we must call Time Out on TikTok” published on Tuesday, UMG, the biggest music company in the world, accused TikTok of attempting to “bully” and “intimidate” them into “accepting a deal worth less than the previous deal, far less than fair market value and not reflective of their exponential growth”.
In the open letter, UMG alleged that TikTok accounts for “only about 1% of our total revenue”, which they said was evidence of “how little TikTok compensates artists and songwriters, despite its massive and growing user base, rapidly rising advertising revenue and increasing reliance on music-based content”.
The music company alleged that, during negotiations for a new agreement, TikTok had “proposed paying our artists and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay”.
When negotiations stalled, UMG alleges that TikTok tried to “intimidate” the company “by selectively removing the music of certain of our developing artists” while keeping bigger stars on the platform.
TikTok on UMG accusation
In a fiery response, TikTok accused UMG of having “put their own greed above the interests of their artists and songwriters.”
“Despite Universal’s false narrative and rhetoric, the fact is 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,” the company said.
TikTok has been able to reach ‘artist-first’ agreements with every other label and publisher. Clearly, Universal’s self-serving actions are not in the best interests of artists, songwriters and fans.”
TikTok AI music
The fallout with Universal Music comes as TikTok dabbles more with music creation and AI. It launched TikTok Music last year in select countries as a rival to Spotify and Apple Music. It is also piloting an “AI Song” feature that allows users to create songs using prompts.
UMG accused TikTok of “allowing the platform to be flooded with AI-generated recordings”. By developing tools that allows users to dabble in AI music creation, TikTok is “sponsoring artist replacement by AI,” UMG said. Claiming that the only means it had to seek the removal of infringing content on TikTok was a “monumentally cumbersome and inefficient process which equates to the digital equivalent of Whac-a-Mole.”
TikTok holds similar agreements with music companies including Sony and Warner Music, which it highlighted in their statement on Tuesday. But whether they share any of UMG’s concerns remains to be seen.
