Universal Music Group (UMG) is now threatening to remove all of its music from TikTok following failed royalty negotiations, the company wrote in a statement. open letter. This would mean TikTok creators would lose access to songs from stars like Taylor Swift, Billy Eilish, The Weeknd, Drake and others.
With the agreement between UMG and TikTok about to expire, the parties have reportedly been in negotiations for a year. Such deals are worth billions a year to music publishing houses and are typically negotiated every few years. Universal is the largest record label in the world, and if its music was removed from TikTok, it would be the first time it had happened in recent memory.
Universal said TikTok wanted to pay a “fraction” of the rate paid by other social media sites. “As our negotiations continued, TikTok attempted to intimidate us into accepting a deal worth less than the previous deal, well below fair market value, and not reflective of their exponential growth.”
In his own post, TikTok said it serves as a valuable marketing tool for artists and publishers. “Despite Universal's false talk and rhetoric, the fact is that they have chosen to walk away from the powerful support of a platform with over a billion users that serves as a free vehicle for promotion and discovery of their talents.”
TikTok also benefits greatly from access to Universal's catalog and being cut off from access to ultra-popular artists like Taylor Swift would be a huge blow to creators and users. TikTok's Chinese parent company ByteDance has more than 3 billion monthly active users and made $29 billion in revenue in a single quarter ending June 2023, according to The Financial Times. Warner Bros. Music, the third label behind Sony Music and UMG, recently struck a deal with TikTok.
Universal said it “does not underestimate what this will mean for artists and their fans” but will not shirk its responsibilities. “TikTok's tactics are obvious: using the power of its platform to harm vulnerable artists and trying to bully us into accepting a bad deal that undervalues music and shortchanges artists and songwriters as well. than their fans.” The company added that payments from TikTok represent “only approximately 1% of our total revenue.”