Universal Music Group, the world’s largest music firm, has stated that if a new contract is not struck by the existing agreement’s expiration date on Wednesday, it would halt licensing content to TikTok.
Universal accuses TikTok of exorbitant charges.
In an open letter to the artist and songwriter community, Universal expressed alarm over TikTok’s planned payment rates, which it alleges are much lower than those offered by other social platforms. The existing contract, which includes well-known artists like Taylor Swift and Drake, is about to expire, and Universal has expressed discontent with TikTok’s proposed arrangement, claiming it is less advantageous than the previous one.
Universal represents a diverse range of music talents, from renowned names such as Swift, Drake, Olivia Rodrigo, the Weeknd, and Eminem to new musicians. The music giant accused TikTok of attempting to utilize its power by selectively eliminating the music of some emerging artists while retaining that of more prominent figures on the platform. In response, a TikTok spokeswoman disputed Universal’s narrative, asserting that the music company has opted to withdraw from a platform with over a billion users, serving as a valuable promotional tool for talent.
While TikTok has grown to be a big influence in the music industry, aiding music discovery and virality, its direct monetary contribution has been minimal, accounting for only approximately 1% of Universal’s income, according to the music giant. Universal claims that TikTok is attempting to develop a music-based business without properly compensating for the value of the music it uses.
TikTok accuses Universal of using “false narrative and rhetoric.”
“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,” a spokesperson for TikTok said in a statement. The corporation stated that Universal’s activities are not in the best interest of artists, songwriters, and fans.
If a new contract is not reached, TikTok will be compelled to erase billions of videos featuring music from Universal’s repertoire, which includes both recorded music and publishing. Universal’s letter emphasized three main issues: equitable pay for artists and songwriters, protecting artists from the detrimental effects of artificial intelligence, and assuring online safety for TikTok users. The music business believes that establishing profitable licensing arrangements with platforms such as TikTok is critical for long-term growth, particularly as streaming income growth slows and licensing opportunities across many digital platforms become more essential.