TikTok Looks Like It’s About To Get A Whole Lot Worse – Here’s Why

Unless a new deal can be agreed, music from the likes of Taylor Swift and Drake could disappear from the platform.

In a statement this week, Universal Music Group (UMG) has said it will pull tracks from TikTok over a dispute in compensation for its artists and songwriters.

If UMG and TikTok are unable to agree a new deal, users will find that music from artists such as Taylor Swift, Drake, and Ariana Grande could disappear from the platform as soon as today.

This comes following the news earlier this month that TikTok Shop is to increase its US seller fees from 2% to 8%, likely annoying a lot of users. 

Time Out For TikTok

TikTok, owned by the Chinese company Bytedance, has an estimated 1.5 billion monthly users, all of whom have access to use music from UMG’s huge roster of artists. However, the Dutch-American-owned music company is prepared to put a stop to this following the publication of an open letter to its artists titled ‘Why We Must Call Time Out On TikTok’.

The crux of the letter revolves around a lack of appropriate compensation for artists and songwriters, stating “TikTok proposed paying our artists and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay. Ultimately TikTok is trying to build a music-based business, without paying fair value for the music.”

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UMG is considered one of the big three global music companies, whose licensed artists also include Elton John, The Beatles, Billie Eilish, Adele, and Coldplay.

Music is an integral part of the platform, featuring on roughly 60% of TikTok videos. It also paves the way for trending content and content discovery. Without the likes of Ariana Grande’s latest track or an Elton John classic being available to use, creators are likely to struggle making videos with viral potential and audiences will find a massive black hole in the platform’s ability to entertain.

UMG Comes Out Swinging

UMG’s statement also alleged that TikTok is playing dirty and trying to “intimidate” by “selectively removing the music of certain of our developing artists, while keeping on the platform our audience-driving global stars.”

“As our negotiations 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” UMG said.

According to the music company, TikTok only accounts for 1% of its advertising revenue, despite its artists making up 80% of the platform’s most popular bands and singers last year.

While it hasn’t responded to specific accusations raised by UMG, TikTok has come out to say that the company is creating a “false narrative and rhetoric” while using deals with other major music labels – such as Warner Music Group – as a way to back up their point that they are being fair with their deals.

In a scathing attempt to paint UMG as greedy, TikTok stated: “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”. 

More Complaints from UMG

Compensation aside, UMG let loose on TikTok’s inability to deal with the “tidal wave of hate speech, bigotry, bullying and harassment on the platform”. Calling the platform’s approach to removing infringing or problematic content as the “digital equivalent of ‘Whack-a-Mole’”. With this, the music giant is seemingly out to protect its artists – many of whom fall victim to music infringement – from all angles. 

Similarly, concerns about AI were also laid bare. According to UMG, the platform is “flooded” with AI-generated recordings, as well as in-app tools that promote the creation and use of AI music. It claims that this will in turn reduce the royalty pool for human artists and likens it to sponsoring artist replacement by AI.

UMG is seemingly standing firm on its stance to not “[concede] to a bad deal that undervalues music and short changes artists and songwriters as well as their fans.” So for now it looks like the compensation ball is firmly in TikTok’s court.

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Written by:
Ellis Di Cataldo (MA) has over 9 years experience writing about, and for, some of the world’s biggest tech companies. She's been the lead writer across digital campaigns, always-on content and worldwide product launches, for global brands including Sony, Electrolux, Byrd, The Open University and Barclaycard. Her particular areas of interest are business trends, startup stories and product news.
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