UMG Will Not Renew Its Contract with TikTok Due to Unfair Compensation
In an open letter addressed to the artist and songwriter community on January 30, 2024, UMG explained that it must “call time out on TikTok” and announced that it would not renew its current licensing agreement with TikTok, which was set to expire the following day at midnight. UMG stated that it would no longer license its music to TikTok. What were the topics that led to the breakdown of the deal? According to UMG, it was TikTok’s unwillingness to
- appropriately compensate UMG’s artists and songwriters,
- protect human artists against AI-generated music, and
- address online safety on the platform to protect artists from “hate speech, bigotry, bullying and harassment.”
In the open letter, UMG did not mince words when it accused TikTok of trying to build a music-based business without paying fair value for the music and capitalizing on the power of its platform at the expense of vulnerable music artists. According to UMG, TikTok proposed paying UMG’s artists and songwriters “at a rate that is a fraction of the rate that similarly situated major social platforms pay,” the label wrote. TikTok, wielding its undeniable influence and ability to catapult artists’ music to their 1.5 billion users worldwide, apparently attempted to stronghold UMG into accepting a bad deal that was worth less than the previous deal, far less than fair market value, and not reflective of TikTok’s exponential growth.
TikTok Claims It Is a Key Promotional Tool for Artists
TikTok fired back at UMG and accused UMG of prioritizing “their own greed above the interests of their artists and songwriters,” highlighting UMG’s decision to forgo what TikTok considered a key discovery and promotional tool for artists. In response, UMG emphasized TikTok’s “woefully outdated view” that artists should be grateful for “free promotion” and that music companies are “greedy” for expecting TikTok to simply compensate artists and songwriters appropriately and on similar levels as other social media platforms currently do. Given the impasse, beginning on February 1, 2024, UMG’s music could not be used legally on TikTok. And on March 1, UMG officially withdrew the rights to its music publishing catalog from TikTok.
Absence of UMG’s Music Catalog Felt Swiftly by TikTok Users
Videos that once featured echoes of “Cruel Summer” in the background were either muted or removed. Many users found ways to avoid TikTok’s removal of UMG’s music by uploading their own versions of the music they captured from other streaming platforms or reproducing new versions of the songs altered by being sped up or adjusted to a different pitch. TikTok has not been successful in policing the sharing of this type of material on its platform.
It seems inevitable that an infringement claim is on the horizon, given the apparent absence of any new agreement between UMG and TikTok, and TikTok users seemingly outsmarting licensing restrictions and sharing unofficial copies of UMG recordings and compositions. In the meantime, UMG is finding other means to promote its artists. In late March, UMG and Spotify, a music streaming platform, expanded their relationship, with UMG artists receiving expanded video and social features to promote new releases.
IMPALA Sides with UMG
Europe’s trade association for indie labels, IMPALA, sided with UMG’s stance on TikTok concerning valuing music properly. IMPALA similarly rejected any argument equating the use of music on TikTok to promotion, reasoning that there is a “huge value gap” that needed to be addressed. Whether TikTok has an answer for this trend—or whether the two sides will make amends—remains to be seen.
