HILVERSUM, NETHERLANDS (CelebrityAccess) – Universal Music Group (UMG) will cease licensing music to TikTok after today (January 31), as its current deal expires. In an open letter to the artist and songwriting community, UMG accused TikTok of “bullying” tactics and failing to pay a fair value for music. UMG will now pull all its music covered by recording and publishing deals, including tracks from major artists like Taylor Swift, Drake, and Harry Styles.
UMG said in a statement on Tuesday (January 30) that the companies have not agreed to terms for a new deal, and upon expiration of their current agreement, UMG, including Universal Music Publishing Group (UMPG), “will cease licensing content” to TikTok and TikTok Music services.UMG acknowledged the challenges that TikTok’s actions would pose and expressed concern for the near-term consequences for its artists and their fans. However, the music company emphasized its responsibility to fight for a new agreement that appropriately compensates artists and respects human creativity on a safe and effectively moderated platform.
TikTok responded, calling UMG’s decision “sad and disappointing,” accusing the music company of prioritizing greed over the interests of artists and songwriters. TikTok stated that despite UMG’s false narrative, they have chosen to walk away from a platform with well over a billion users, serving as a free promotional and discovery vehicle for their talent.
UMG accused TikTok of attempting to build a music-based business without paying fair value for the music. The major music company raised concerns about AI-generated recordings flooding the platform and TikTok’s demands for contractual rights that could dilute the royalty pool for human artists. UMG also criticized TikTok’s handling of infringing content, content adjacency issues, and issues related to hate speech, bigotry, bullying, and harassment on the platform.
The negotiations between TikTok and UMG occurred as major labels sought new revenue sources beyond traditional audio streaming platforms. UMG stressed its commitment to fair deals that protect artists, songwriters, and rights-holders. Despite TikTok being fully licensed and having agreements with other majors and independents, UMG accused the platform of trying to intimidate them into accepting an unfavorable deal.
TikTok, in response, highlighted its agreements with other labels and publishers, emphasizing its role as a powerful platform for promoting and discovering talent. The licensing dispute between TikTok and UMG highlights the complex relationship between technology platforms and the music industry, particularly as these platforms gain more leverage over royalties and rights-holders.
Open Letter to the Artist and Songwriter Community
Our core mission is simple: to help our artists and songwriters attain their greatest creative and commercial potential. To achieve these goals, our teams employ their expertise and passion to strike deals with partners all around the world, partners who take seriously their responsibilities to fairly compensate our artists and songwriters and treat the user experience with respect.
One of those partners is TikTok, an increasingly influential platform with powerful technology and a massive worldwide user base. As with many other platforms with whom we partner, TikTok’s success as one of the world’s largest social platforms has been built in large part on the music created by our artists and songwriters. Its senior executives proudly state publicly that “music is at the heart of the TikTok experience,” and our analysis confirms that the majority of content on TikTok contains music more than any other major social platform.
The terms of our relationship with TikTok are set by contract, which expires January 31, 2024. In our contract renewal discussions, we have 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.
We have been working to address these and related issues with our other platform partners. For example, our Artist-Centric initiative is designed to update streaming’s remuneration model and better reward artists for the value they deliver to platforms. In the months since its inception, we’re proud that this initiative has been received so positively and taken up by a range of partners, including the largest music platform in the world. We’ve also moved aggressively to embrace the promise of AI while fighting to ensure artists’ rights and interests are protected now and far into the future. In addition, we’ve engaged a number of our platform partners to try to drive positive change for their users and, by extension, our artists by addressing online safety issues, and we are recognized as the industry leader in focusing on music’s broader impact on health and wellness.
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. Today, 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.
On AI, 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 that 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.
Further, TikTok makes little effort to deal with the vast amounts of content on its platform that infringes on 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 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 “Whack-a-Mole.”
But when we proposed that TikTok take similar steps as our other 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. 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.
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.
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.
We recognize the challenges that TikTok’s actions will cause and do not underestimate what this will mean to our artists and their fans, who, unfortunately, will be among those subjected to the near-term consequences of TikTok’s unwillingness to strike anything close to a market-rate deal and meaningfully address its obligations as a social platform. But we have an overriding responsibility to our artists to fight for a new agreement under which they are appropriately compensated for their work on a platform that respects human creativity in an environment that is safe for all and effectively moderated.
We honor our responsibilities with the utmost seriousness. Intimidation and threats will never cause us to shirk those responsibilities.
