Universal Music Group and TikTok Clash Over New Licensing Agreement

Universal Music Group (UMG) threatens to pull its entire song catalog from TikTok after failed negotiations over a new licensing agreement. The dispute, which is around issues of artist compensation, artificial intelligence (AI), and fair market value, has come into a public confrontation with both parties issuing fiery statements.

Universal Music Group and TikTok Clash Over New Licensing Agreement

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Universal Music Group, has an unparalleled roster of artists ranging from iconic legends like The Beatles and Bob Dylan to contemporary chart-toppers like Taylor Swift and Harry Styles, holds a position of influence in the music industry.

The company’s agreement with TikTok, set to expire within the next 24 hours, puts some of the world’s most popular music in jeopardy of being removed from the social media platform.

In a worded open letter titled “Why we must call Time Out on TikTok,” UMG accused TikTok of attempting to bully and intimidate them into accepting a deal that undervalues music and falls short of fair market value.

The letter, published on Tuesday, outlines the music giant’s grievances with TikTok’s proposed terms, which it claims are lower than those offered by other social platforms.

In a response, TikTok accused Universal Music Group of prioritizing greed over the interests of artists and songwriters. The social media platform, owned by Chinese company ByteDance, addressed its support for emerging talent and its role as a powerful promotional and discovery vehicle for artists.

TikTok argued that Universal Music Group’s decision to walk away from a platform with over a billion users is not in the best interest of artists, songwriters, or fans.

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Universal Music Group revealed that TikTok accounts for only about 1% of its total revenue, despite the platform’s massive user base, increasing advertising revenue, and growing reliance on music-based content.

This statistic questions about TikTok’s compensation practices for artists and songwriters compared to other social platforms.

Universal Music Group alleged that TikTok proposed paying artists and songwriters at a rate far below what other similar social platforms offer.

The open letter also accused TikTok of selectively removing the music of certain developing artists during negotiations, a move perceived as an attempt to intimidate UMG into accepting a less favorable deal.

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Universal Music Group expressed concerns about TikTok allowing the platform to be flooded with AI-generated recordings, issues related to the dilution of the royalty pool for human artists. The music company accused TikTok of sponsoring the replacement of artists by AI.

Universal Music Group criticized TikTok for its alleged lack of effort in addressing copyright infringement issues and content adjacency problems on its platform.

The music company claimed that TikTok’s response to these concerns was indifferent and, at times, intimidating.

Universal Music Group said that the cumbersome process required to seek the removal of infringing or problematic content, likening it to a digital version of Whac-a-Mole.

TikTok holds similar agreements with other major music labels, including Sony and Warner Music. Whether these labels share UMG’s concerns or have experienced similar challenges remains unclear.

As TikTok continues to grow and diversify its offerings, it has ventured into music creation and AI. The platform launched TikTok Music as a rival to established streaming services and introduced an AI Song feature that enables users to create songs using prompts.

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