Universal Music Group versus TikTok – what’s behind the dispute?
The two business giants' dispute over royalties has silenced TikTok
From Thursday, 1 February TikTok wasn’t silent, but it was a lot quieter. Starting from Friday last week, anyone who wanted to add a pop hit to their new TikTok video had to look for alternatives. Taylor Swift’s “Cruel Summer”? Silenced. The latest smash hit by rapper Nicki Minaj, “Big Foot”? No longer available on the platform. An endless list of other popular titles by big stars like Billie Eilish, Drake or Harry Styles? Gone. Why this is happening, what AI has to do with it, and what could happen next are the questions on everyone’s lips.
What has happened so far
The existing contract between TikTok and the mega-music group Universal and Universal Publishing expired on 31.01.2024. To date, the two mega-corporations have not been able to reach an agreement.
The basic cornerstones of the contract were that Universal has always licensed its musical content on the TikTok platform against remuneration. This meant TikTok always had access to the music of the artists who are under contract with the Universal Music Group (the group has the most popular musicians in the world under contract) and thus the use of its content, i.e. for musical accompaniment, was always guaranteed for its users for the countless videos and trends. A win-win situation.
But since the contract negotiations broke down, there have been allegations and accusations on both sides. The issues are remuneration and what to do with AI-generated songs. There is currently no licence agreement between Universal and TikTok.
All Universal Music Group artists and publishers, i.e. also lyricists and songwriters, are affected by this radical step on TikTok. As of 2022, Universal has the rights to at least three million songs. Including the publishing rights of songwriters who are under contract with Universal and are involved in numerous hits, millions more titles would be affected. In an open letter, Universal made serious allegations against TikTok.
The success of the subsidiary of the Chinese internet giant ByteDance, as one of the largest platforms in the world, is based largely on the music created by our artists.
Universal accuses TikTok of pursuing a music-based business model without paying a fair price. According to Universal, TikTok pays only a fraction of what other platforms would pay for their artists’ music. There was even talk of “intimidating” and “coercing into a deal” from Universal. In addition, the new contract is apparently worse than the old one. TikTok is also allegedly allowing music created using artificial intelligence on the platform in a big way – and wants contractual freedom to do so. In doing so, the platform is supposedly effectively driving “the replacement of artists with AI”. TikTok dismissed the allegations as false. Their answer to Universal Music Group’s allegations was:
It is sad and disappointing that Universal Music Group has put its own greed over the interests of its artists and songwriters.
What it all means
The loss of Universal Music artists is already leading to dissatisfied TikTok users. There are trends on TikTok that make fun of the restriction, but there is also outrage and there are calls to let the artists themselves decide whether or not they want to be represented on TikTok. Universal Music admitted that the move would have consequences for its own musicians. However, they say the responsibility to fight for fair conditions remains at the forefront.
The fact is TikTok can provide a career boost, especially for newcomers, for example, when a song is used by TikTok users for their own clips – it could potentially go viral. Back in November, TikTok published a report in which it touted its role as a “launch pad for viral hits and new artists”. This “Music Impact Report” pointed out that TikTok helps users discover music and get in touch with artists. In addition, it is reported that TikTok users are more likely to use a paid music streaming service, which also represents added value for the artists.