Universal Music Group and TikTok have reached an agreement on a new licensing deal, ending a three-month standoff that saw the world's largest record label pull its vast music catalog from the social media platform.
According to a Press release Announcing the deal, it “will provide enhanced compensation for UMG songwriters and artists, new promotion and engagement opportunities for their recordings and songs, and industry-leading protections regarding generative AI.”
UMG and TikTok are “now working quickly to return music from artists represented by Universal Music Group and songwriters represented by Universal Music Publishing Group to TikTok in due course,” the press release added.
Regarding AI specifically, TikTok will work with UMG to “remove unauthorized AI-generated music from the platform, as well as [develop] tools to improve the attribution of artists and composers.”
UMG initially pulled its catalog from TikTok on January 31 after the two companies failed to reach a new licensing agreement. At the time, the label cited three main sticking points: compensation for artists, AI protections, and just safety protections for artists and fans.
When it came to compensation, UMG alleged that TikTok had proposed a royalty rate that was “a fraction of the rate paid by major social platforms in similar situations,” and noted that in 2022 TikTok had paid less in royalties ($220 million) than the fitness fee. Peloton app ($267 million) despite having a much larger user base.
UMG and TikTok did not provide any specific details about their newly negotiated royalty rate. However, in a letter sent to employees on Thursday, UMG's president and CEO said: “Under the new agreement, compensation for artists and songwriters will be greater than under our previous agreement with TikTok, and the total value that the “UMG artists and songwriters will gain from this partnership to be more closely aligned with other platforms in the social music category.”
Despite reaching a deal with UMG, TikTok still has plenty of other headaches to deal with, particularly its own existence. Last month, the US Congress passed a bill requiring Chinese-owned company ByteDance to sell TikTok within a year or face a permanent ban in the US. ByteDance says it has no intention of selling TikTok and has vowed to take its fight to court.
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