Universal Music Group will stop licensing its music library to TikTok after both companies failed to reach an agreement over several issues, including artist payments and AI-generated content, the label announced Tuesday—meaning music from some of the world’s biggest artists could be taken off the platform on Wednesday.
UMG criticized TikTok for low artist payouts and failing to act against AI-generated music.
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Key Takeaways
- In a statement, Universal said its existing licensing deal with TikTok will expire on Wednesday, after which its songs will be removed from the service.
- UMG said it pressed TikTok on three issues during contract renewal discussions: compensation for artists, “protecting human artists from the harmful effects of AI, and online safety for TikTok’s users.”
- The label alleges TikTok proposed payouts for artists and songwriters “at a rate that is a fraction of the rate that similarly situated major social platforms pay.”
- UMG said TikTok accounts for only 1% of the company’s total revenue, which was “an indication of how little TikTok compensates artists and songwriters, despite its massive and growing user base.”
- The label also called out TikTok for allowing the platform to be “flooded with AI-generated recordings”, building AI music creation tools and pushing for contracts that would “allow this content to massively dilute the royalty pool for human artists.”
- UMG also knocked the social media company for failing to act against content that infringes on their music and the “tidal wave of hate speech, bigotry, bullying and harassment on the platform.”
Key Background
The loss of access to UMG’s content library is likely a major setback for TikTok as one of its key features is allowing users on the platform to easily add licensed music to their videos. The company has also been working to build a music streaming service to take on the likes of Spotify and Apple Music. UMG is the largest record label in the world and its stable of artists includes Taylor Swift, Billie Eilish, Bad Bunny, Drake, The Weeknd, Justin Bieber, Ariana Grande, Harry Styles, Kendrick Lamar, Adele, Post Malone and several other high profile stars.
Crucial Quote
“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’s statement added. The company claimed TikTok tried to pull this off by “selectively removing the music of certain of our developing artists, while keeping on the platform our audience-driving global stars.”
Chief Critic
TikTok lashed out at UMG for putting “their own greed above the interests of their artists and songwriters,” in response. The social media company accused the label of engaging in “false narrative and rhetoric” and said UMG has “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.”
What To Watch For
TikTok’s CEO Shou Zi Chew will face a Senate hearing on Wednesday to discuss online child safety. This is the second time Chew asked to testify in front of lawmakers in Washington after a testy exchange in March last year over the Chinese-owned platform’s handling of U.S. user data. Meta CEO Mark Zuckerberg, X CEO Linda Yaccarino, Snap CEO Evan Spiegel and Discord CEO Jason Citron are also set to testify on Wednesday.
This article was first published on forbes.com and all figures are in USD.
