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Universal Music Group (UMG), the renowned music label representing popular artists like Taylor Swift, Billie Eilish, and Ariana Grande, has announced that it will remove its music from TikTok starting tomorrow at midnight. This decision comes as a result of UMG’s inability to reach a royalty agreement with ByteDance, the parent company of the TikTok platform.
UMG has decided not to renew its current arrangement with TikTok, which is set to expire on January 31. Additionally, UMG intends to stop licensing content to both TikTok and its music-focused service, TikTok Music.
UMG issued a press release alleging that TikTok, which purportedly generated nearly $20 billion in ad revenue in the previous year, is attempting to establish a music-focused enterprise without adequately compensating artists for their music.
The label expressed concern over TikTok’s proposed payment rate, stating that it falls significantly below what other major social platforms offer to artists and songwriters in similar situations. “Currently, TikTok’s contribution to our total revenue is quite minimal, despite its large and expanding user base, significant advertising income, and growing dependence on music-related content. It is worth noting that TikTok’s compensation for artists and songwriters is relatively low.”
No response was received from TikTok regarding the comment request. However, a spokesperson later sent a statement via email in the evening:
It is regrettable and disheartening that Universal Music Group has prioritized their financial gain over the well-being of their artists and songwriters. Universal’s decision to disassociate from a platform with a massive user base of over a billion people, which serves as a valuable tool for promoting and discovering talent, contradicts their claims and arguments. TikTok has successfully established ‘artist-first’ agreements with all other labels and publishers. It is evident that Universal’s actions prioritize their own interests rather than those of artists, songwriters, and fans.
According to the press release from UMG, TikTok and UMG had differing views on the payment terms for AI-generated recordings involving UMG properties. Furthermore, TikTok failed to promptly remove content that infringed upon the label’s copyright, according to UMG.
“TikTok’s objective is to establish a music-focused enterprise, while neglecting to adequately compensate for the music,” UMG expressed.
UMG’s existing agreement with TikTok, which commenced in 2021, encompasses recorded music produced by artists under UMG’s labels and songwriters affiliated with Universal Music Publishing Group. UMG and TikTok have entered into an agreement to explore innovative features. This includes the option for users to include clips from UMG’s extensive music catalog, which includes popular artists such as Bad Bunny, SZA, Drake, Kendrick Lamar, Harry Styles, Justin Bieber, Adele, U2, and Elton John.
TikTok’s increased focus on music creation and curation has led to a fallout with UMG.
TikTok Music, launched in select countries last year, is being positioned as a strong competitor to Spotify and Apple Music. Additionally, TikTok is currently testing a “AI Song” feature which utilizes artificial intelligence to generate songs in response to user prompts.
TikTok has demonstrated a willingness to collaborate with select labels on terms that are advantageous to the platform. Throughout 2022 and 2023, discussions were reportedly held with Warner Music Group, Sony Music Entertainment, and UMG to negotiate a portion of its advertising revenues. However, TikTok has not hesitated to assert its influence in situations it deems appropriate. In February of last year, TikTok conducted a test in Australia by removing music from major record companies for a specific group of users. The purpose of this test was to observe the impact on user engagement.
In recent times, TikTok has been actively pursuing exclusive distribution agreements with musicians for ByteDance’s SoundOn service. This service allows for direct distribution to both TikTok and various music streaming platforms. In addition, a program called Elevate has been introduced with the purpose of identifying promising artists in the music industry.
