Universal Music Group vs. TikTok: Contractual discourse strikes a sour note
Starting Feb. 1, 2024, many of TikTok’s 1.5 billion users began to notice the death of previously trending audios, such as snippets from Arianna Grande’s “yes, and?” on their “For You” pages. Rather, users have been met with the alert “sound removed due to copyright restrictions.”
The contract between Universal Music Group and TikTok was set to expire on Jan. 31, 2024; however, when the two parties entered contract renewal discussions, they failed to negotiate a compromise. On Jan. 30, 2024, UMG published an open letter entitled, “Why we must call time out on TikTok.” This letter explained the three main reasons the company decided to remove their entire sound catalog from the popular social media platform. According to UMG, they entered negotiations with TikTok focusing on “three critical issues — appropriate compensation for our artists and songwriters, protecting human artists from the harmful effects of AI, and online safety for TikTok’s users.”
UMG explained that while they have been able to successfully negotiate these terms with other similar partner platforms, TikTok was unwilling to compromise with the group. The letter states that Tik Tok pays artists a small fraction compared to similarly situated platforms. It covers that even though the platform is an incredibly large platform that heavily relies on music, it accounts for only about 1% of the revenue of UMG. The letter states “Ultimately TikTok is trying to build a music-based business, without paying fair value to the music.”
The letter continues by explaining the lack of action that TikTok takes to protect artists, including their music being reproduced without compensation, and the true challenges of reporting things such as bigotry and harassment through the platform.UMG accused TikTok of attempting to “bully” the company into accepting a poor deal “by selectively removing the music of certain of [their] developing artists, while keeping on the platform [their] audience-driving global stars.”
The conclusion of the statement reiterated UMG’s commitment to fighting for a deal that adequately compensates artists for their contribution and ensures all their artists will only be “on a platform that respects human creativity, in an environment that is safe for all, and effectively moderated”
An article on the matter on Music Business Worldwide breaks down the estimated amount of money TikTok paid the entire music rights industry in 2023. Based on the math, as well as data on both of the companies’ net revenues, the article highlights that the potential basis of UMG’s monetary complaints may be because of the fact that TikTok likely only diverts a maximum of about 2.2% of their revenue to the music rights industry.
TikTok itself, as well as many of its users and UMG’s own artists, have been quite critical of the company’s decision in spite of its claim of putting artists first. In a response to the open letter, TikTok released a statement accusing UMG of putting “their own greed above the interests of their artists and songwriters.” According to TikTok, their platform is ideal for free promotion of music, meaning in removing their catalog, UMG may have cost their artists plenty of opportunities to market their music.
Many of UMG’s own artists seem to be expressing their fears for the future of their careers without the assistance of TikTok’s promotion. Noah Kahan, a popular, Grammy nominated artist, posted a TikTok question, “I’ll probably be ok right? I’ll land on my feet, right?” Kahan grew to fame through the app and has been using it recently to promote a song launching on Feb. 9. He encouraged fans to presave, assuring them that it will still be released as planned. Kahan is not alone in his anxieties regarding the ability of his music to perform without the aid of the social media platform. Musician Conan Gray mentioned in an interview, “My career is over, for sure. I’m never gonna have a hit song again at this rate. No, no, it’s fine. TikTok has its ups and downs, and I guess we’ll see what happens. I guess we’ll be creative. There’s gonna be a lot of interesting a cappella covers happening from UMG artists until this is settled.”
Even smaller artists who are not directly affiliated with UMG are being impacted. In addition to the artists signed directly under UMG, the company is home to many other distributors. For smaller musicians on TikTok, any affiliation with these distributors means their music is also at risk of being pulled.
The loss of this partnership will result in some changes for the TikTok platform. UMG artists can no longer use the social media app to promote and share their music, even if it was how they got noticed and signed by UMG in the first place. Popular artists encourage TikTok users to continue listening through other streaming platforms, as music continues to be released.