Universal Music Group — the behemoth record label that’s home to artists like Taylor Swift, Drake, and Billie Eilish — has threatened to pull its vast song catalog from TikTok if the companies don’t reach a new licensing deal by their current contract’s expiration on Wednesday (January 31st).
As laid out in an open letter posted on Tuesday (January 30th), the sticking points are three issues: “appropriate compensation for our artists and songwriters, protecting human artists from the harmful effects of AI, and online safety for TikTok’s users.” Universal said its efforts were met “first with indifference, and then with intimidation.”
“TikTok proposed paying our artists and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay,” the open letter stated, adding that the social media platform only accounts for about 1% of UMG’s revenue — despite its growing user base of over 1 billion (with 150 million users in the US alone) and “increasing reliance” on music.
To Universal’s point, a Goldman Sachs report released in June 2023 revealed that Peloton paid $267 million to the music industry over the previous year compared to TikTok’s $220 million — with a user base of just 6.7 million.
Regarding AI, Universal claimed TikTok is doing nothing to prevent its platform from being “flooded with AI-generated recordings” while also creating tools to enable AI music creation. The label continued by saying TikTok is “demanding” the right to “dilute the royalty pool for human artists, in a move that is nothing short of sponsoring artist replacement by AI.”
Finally, UMG took TikTok to task for not offering “meaningful solutions” to combat copyright infringement of its artists’ music and stem “the tidal wave” of hate speech, bigotry, and bullying on the platform.
TikTok responded to Universal with a statement of its own on Tuesday night. “It is sad and disappointing that Universal Music Group has put their own greed above the interests of their artists and songwriters,” the company wrote. “Despite Universal’s false narrative and rhetoric, the fact is they have chosen to walk away from the powerful support of a platform with well over a billion users that serves as a free promotional and discovery vehicle for their talent.”
“TikTok has been able to reach ‘artist-first’ agreements with every other label and publisher,” that statement continued. “Clearly, Universal’s self-serving actions are not in the best interests of artists, songwriters and fans.”