Universal Music Group (UMG), the world's largest music company, has threatened to revoke TikTok's license if the two companies fail to reach a deal on key issues such as artist compensation. UMG owns the rights to superstars including Taylor Swift, Olivia Rodrigo, Billie Eilish, and Drake. The company wants TikTok to increase payments to its artists and address the growing trend of using artificial intelligence (AI) to create music on the Chinese-owned video-sharing app.
Revoking TikTok's license, which expires on Wednesday, could have a devastating impact on the app as approximately 60% of the videos posted on its platform include music. UMG accused TikTok of proposing to pay artists and songwriters at a rate that is significantly lower than what other major social platforms pay. The company also claimed that TikTok attempted to bully them into accepting a deal worth less than the previous one, not reflective of their exponential growth, and far below fair market value.
UMG did not disclose the amount it was paid in its previous deal or the increase it is seeking from TikTok. However, TikTok has an estimated 1.5 billion monthly users. In response, TikTok accused UMG of prioritizing their own greed over the interests of artists and songwriters. The company highlighted that UMG's musicians represented eight out of the ten most popular bands and singers on the platform last year, despite TikTok accounting for only 1% of UMG's advertising revenue.
UMG expressed concerns about the use of AI tools in TikTok videos and their impact on intellectual property. The company also criticized the amount of copyright infringement on the platform and the prevalence of hate speech, bigotry, bullying, and harassment. UMG claimed that TikTok selectively removed the music of certain developing artists while keeping audience-driving global stars.
TikTok, however, has not specifically responded to these allegations. Instead, the company accused UMG of spreading a false narrative and rhetoric. TikTok pointed out that it has signed deals with other major music labels, including Warner Music Group, which represents artists such as Madonna, Lizzo, and Ed Sheeran. The company emphasized that UMG's decision to walk away from a platform with over a billion users, which serves as a free promotional and discovery vehicle for their talent, was disappointing.
The potential removal of UMG's music from TikTok could have significant consequences for both parties. TikTok's estimated 1.5 billion monthly users rely on the platform to enhance their videos with music from UMG's extensive catalog. UMG, on the other hand, represents a wide range of popular artists and stands to lose potential exposure and promotional opportunities by severing ties with TikTok. The outcome of their negotiations remains uncertain as the deadline approaches.
