Universal Music Group, one of the largest music companies in the world, said it failed to reach new deal terms with TikTok 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.
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.
In response to UMG, TikTok said in a statement, “It is sad and disappointing that Universal Music Group has 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. 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.”
Three years ago, in February 2021, UMG touted a global agreement withTikTokthat 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.”
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 the letter, the music company called TikTok “an increasingly influential platform with powerful technology and a massive worldwide user base.” UMG said that in its contract renewal discussions with TikTok, it has “been pressing them on three critical issues — appropriate compensation for our artists and songwriters, protecting human artists from the harmful effects of AI, and online safety for TikTok’s users.”
With respect to the issue of artist and songwriter compensation, TikTok “proposed paying our artists and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay,” according to UMG’s letter. As an indication 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, TikTok accounts for only about 1% of our total revenue.”
“Ultimately TikTok is trying to build a music-based business, without paying fair value for the music,” UMG said in the letter.
Regarding the issue of artificial intelligence, TikTok “is allowing the platform to be flooded with AI-generated recordings — as well as developing tools to enable, promote and encourage AI music creation on the platform itself — and then demanding 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,” UMG said.
In addition, according to Universal Music, TikTok “makes little effort to deal with the vast amounts of content on its platform that infringe our artists’ music and it has offered no meaningful solutions to the rising tide of content adjacency issues, let alone the tidal wave of hate speech, bigotry, bullying and harassment on the platform.” The music company claimed that the only means available to seek the removal of infringing or problematic content (such as pornographic deepfakes of artists) is “through the monumentally cumbersome and inefficient process which equates to the digital equivalent of Whac-a-Mole.”
According to UMG, when it proposed that TikTok take similar steps as other digital platform partners to try to address these issues, “it responded first with indifference, and then with intimidation.”
“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,” UMG wrote. It claimed TikTok tried to intimidate the company “by selectively removing the music of certain of our developing artists, while keeping on the platform our audience-driving global stars.”
“TikTok’s tactics are obvious: use its platform power to hurt vulnerable artists and try to intimidate us into conceding to a bad deal that undervalues music and shortchanges artists and songwriters as well as their fans,” UMG said. “We will never do that. We will always fight for our artists and songwriters and stand up for the creative and commercial value of music.”
The company added, “We honor our responsibilities with the utmost seriousness. Intimidation and threats will never cause us to shirk those responsibilities.”
