Taylor Swift, Drake, BTS Music May Leave TikTok This Week As UMG Licensing Talks Collapse

Universal Music Group (UMG) says it will pull its entire music catalog from TikTok when its contract with the service expires on Wednesday (January 31), accusing the platform of “trying to build a music-based business without pay fair value for music,” according to an open letter released on Tuesday (January 30).

In the letter, addressed to UMG's artists and songwriters, the company says it is particularly concerned about the prices TikTok is offering to pay for its catalog. Other points of contention include the amount of content on TikTok that infringes on the works of its artists and songwriters without providing “substantial solutions” to help them combat it, the level of hate and harassment on the platform, and TikTok's stances on artificial intelligence (AI); .

According to UMG, during negotiations, the ByteDance-owned social giant “demanded a contractual right that would allow [AI] as long as it massively reduces the royalty pool for human artists, which UMG states is “nothing short of sponsoring AI artist replacement.”

If UMG withdraws its catalog, it will affect all music distributed and managed by the recorded music division as well as Universal Music Publishing Group.

UMG's latest deal with TikTok to license its recorded music and publish it was announced on February 8, 2021. In July, WMG signed a multi-year licensing deal with TikTok that allows the company to use WMG's music and in its app as CapCut and its new “social streaming platform” TikTok Music, which is currently available in Brazil, Indonesia, Australia, Singapore and Mexico. At the time the deal was announced, CEO/chairman of WMG Robert Kyncl and CEO of TikTok Shou Chew he said the deal would benefit artists.

This is not the first time the music industry has had problems with TikTok. In 2019, when the platform was just getting started, the National Music Publishers' Association (NMPA) called on Congress to investigate TikTok for possible copyright theft. It was also reported around that time that TikTok was operating under expired contract extensions that arose from when it acquired Musical.ly in late 2017. In March 2020, Advertising sign reported that all three major companies had entered into short-term licensing deals with TikTok.

Read the full open letter below.

Our core mission is simple: to help our artists and songwriters achieve their greatest creative and commercial potential. To achieve these goals, our teams use their expertise and passion to forge deals with partners around the world, partners who take seriously their responsibilities to fairly compensate our artists and songwriters and address the experience of user with respect

One of these partners is TikTok, an increasingly influential platform with powerful technology and a huge global user base. As with many other platforms we work with, TikTok's success as one of the largest social platforms in the world has been built in large part on the music created by our artists and songwriters. Its senior executives proudly state publicly that “music is at the heart of the TikTok experience,” and our analysis confirms that the majority of content on TikTok contains music, more than any other major social platform.

The terms of our relationship with TikTok are set out in a contract, which expires on January 31, 2024. In our contract renewal discussions, we pressed them on three critical issues—proper compensation for our artists and songwriters, protecting people from the harmful effects of artificial intelligence and online safety for TikTok users.

We are working to address these and related issues with our other platform partners. For example, our Artist-Centric initiative is designed to update the streaming fee model and better reward artists for the value they bring to platforms. In the months since its launch, we are proud that this initiative has been so positively received and adopted by a range of partners, including the largest music platform in the world. We've also moved aggressively to embrace the promise of artificial intelligence while fighting to ensure that artists' rights and interests are protected now and in the future. In addition, we have engaged several of our platform partners to try to drive positive change for their users and by extension our artists by addressing online safety issues and are recognized as an industry leader in focusing on music's broader impact on health and wellness .

Regarding the issue of artist and songwriter compensation, TikTok has proposed to pay our artists and songwriters at a rate that is a fraction of what large social media platforms of a similar location pay. Today, in a sign of how little TikTok compensates artists and songwriters, despite its massive and growing user base, rapidly growing ad revenue, and growing reliance on music-based content, TikTok accounts for only about 1% of of our total revenue.

Ultimately TikTok is trying to build a business based on music without paying fair value for music.

In AI, TikTok allows the platform to be flooded with AI-generated recordings – as well as develop tools to enable, promote and encourage AI music creation on the platform itself – and then requires a conventional right that would allow this content to massively reduce the pool of rights for human artists, in a move that amounts to nothing less than sponsoring the replacement of the artist by AI.

Additionally, TikTok is making little effort to address the vast amounts of content on its platform that infringes on our artists' music, and has offered no meaningful solutions to the rising tide of content proximity issues, let alone the tidal wave of hate speech, bigotry. bullying and harassment on the platform. The only means available to pursue the removal of infringing or problematic content (such as pornographic deepfakes by artists) is through the monumentally cumbersome and inefficient process that amounts to the digital equivalent of “Whack-a-Mole.”

But when we suggested that TikTok take similar steps as our other platform partners to try to address these issues, it responded first with indifference, then with intimidation.

As our negotiations continued, TikTok tried to bully us into accepting a deal worth less than the previous deal, well below fair market value and not reflective of their exponential growth. How did he try to intimidate us? By selectively removing the music of some of our emerging artists, while keeping our audience-driving global stars on the platform.

TikTok's tactics are obvious: use the power of its platform to hurt vulnerable artists and try to bully us into accepting a bad deal that devalues ​​music and diminishes artists and songwriters and their fans.

We will never do that.

We will always fight for our artists and songwriters and defend the creative and commercial value of music.

We recognize the challenges that TikTok's actions will cause, and we don't underestimate what this will mean for our artists and their fans who, unfortunately, will be among those to suffer the short-term consequences of TikTok's reluctance to hit anything close to a market- and effectively face its obligations as a social platform. But we have a primary responsibility to our artists to fight for a new deal where they are properly compensated for their work, on a platform that respects human creativity, in an environment that is safe for all and effectively moderated.

We take our responsibilities very seriously. Intimidation and threats will never make us avoid these responsibilities.

(This is a developing story.)