Universal Music Group announced in an open letter Tuesday night that it would revoke its licensing agreement with TikTok if the companies could not reach a new deal to compensate artists and songwriters whose works are used across the social media platform. UMG is the world’s largest music company, managing talent the likes of Taylor Swift, BTS, Drake, Ariana Grande and Justin Bieber. TikTok, owned by Chinese company ByteDance, hosts more than 1 billion active users on its platform.
In the letter, Universal alleged that during renewal discussions with TikTok leading up to their contract expiring Jan. 31, there were three issues that the two couldn’t seem to agree on: Compensation for artists and songwriters, protecting artists from artificial intelligence (AI) and online safety for TikTok users.
“TikTok makes little effort to deal with the vast amounts of content on its platform that infringe our artists’ music and it has offered no meaningful solutions to the rising tide of content adjacency issues, let alone the tidal wave of hate speech, bigotry, bullying and harassment on the platform,” Universal wrote.
“Ultimately TikTok is trying to build a music-based business, without paying fair value for the music,” the letter continued. “TikTok attempted to bully us into accepting a deal worth less than the previous deal, far less than fair market value and not reflective of their exponential growth.”
Music is a huge part of the TikTok experience — especially for up-and-coming artists, plenty of whom have been discovered on the platform. Artists like Lil Nas X, Doja Cat and Jack Harlow owe credit to their songs going viral on TikTok for their current careers. Other artists, like Mitski, gained entirely new fandoms after having songs go viral.
TikTok is so influential that in 2022, several artists shared their frustrations with their record labels for allegedly pushing them to create music specifically for the social platform. (Although there was some debate as to whether complaining about being expected to go viral on TikTok was a way to go viral on TikTok.)
TikTok is aware of its impact. In a response letter, posted hours after Universal released its statement, TikTok accused Universal of choosing 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.”
Universal did not respond to Yahoo News's request for comment. TikTok directed Yahoo News to its response letter.
TikTok’s response did not acknowledge Universal’s accusations that the platform had offered a rate for artists and songwriters that allegedly “is a fraction of the rate that similarly situated major social platforms pay.” Universal claimed TikTok streams account for only 1% of the company’s total revenue.
It also did not respond to Universal claiming that the app is “flooded with AI-generated recordings” as well as “tools to enable, promote and encourage AI music creation” which “is nothing short of sponsoring artist replacement by AI.”
TikTok’s interest in AI music hasn’t been a secret. In 2019, TikTok bought the music-making AI platform Jukedeck, which allowed users to generate music and adjust elements like length and tempo. At the time, it was advertised as a big win for the platform and for users: TikTok wouldn’t have to pay for the music and creators wouldn’t have to worry about sharing their videos off-platform and potentially violating other social media licensing agreements.
Most reactions on social media seem to point out that both Universal and TikTok have mismanaged artists and songwriters for years — it’s not one or the other. Others debated whether this would help or hurt smaller, independent artists.
“I don't think well-established artists with an already devoted fanbase … will be affected much,” one Reddit user pointed out in a discussion about the news, citing artists like Taylor Swift, Drake, Ariana Grande, Billie Eilish as examples.
“I think it will hurt smaller artists who don't have a fanbase,” another person agreed.
“It is extremely difficult for smaller artists to gain significant traction off the platform from tiktok alone,” a commenter explained. “TikTok can be a massive accelerator for specific songs or moments, but it is rarely a total career accelerator.”
As of reporting, it’s not clear whether the discussions have continued between Universal and TikTok. Universal's music catalog will start being removed from TikTok starting on Jan. 31, although TikTok is still fully licensed and has agreements in place with other major and independent labels.