UMG’s TikTok Licensing Feud: Music Industry Reactions (Updating)

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Universal Music Group (UMG), the world’s largest music company, released an open letter to its artists and songwriters on Tuesday (Jan. 30) stating that the company’s music would soon leave TikTok due to disagreements over compensation, artificial intelligence, infringing works and harassment.

TikTok replied a few hours later, calling UMG’s letter a “false narrative” and stating that it was “sad and disappointing that [UMG] has put their own greed above the interests of their artists and songwriters.” The short-form video app noted that it acts as an important “free promotion” and “discovery” tool for UMG’s artists.

By Thursday (Feb. 1), much of the recorded music released by UMG had been removed from TikTok, affecting 21 of the tracks on the TikTok Billboard Top 50 chart. That day, UMG released another statement calling TikTok’s view on music licensing “woefully outdated.”

“TikTok didn’t even attempt to address the other issues we raised regarding harmful AI and platform safety,” the statement continued.

Other music businesses and organizations have added to the conversation with their own statements. Read below for those reactions.

NMPA president/CEO David Israelite: “Music is a driving force behind TikTok’s success and it is extremely unfortunate that TikTok does not seem to value the music creators that fuel its business. We believe songwriters should be valued and compensated fairly, and we believe artificial intelligence should never be used to dilute the value of human creativity. We have seen other social media platforms make the mistake of claiming promotion should substitute for fair compensation. It’s a losing argument and it is wrong.”

Primary Wave founder/CEO Larry Mestel: “The notion that TikTok would try to rationalize willfully underpaying artists because, the platform says, it offers artists ‘promotion’ is a decades-old canard that has no place in any modern music business. Artists and songwriters need to be compensated appropriately for their work and protected from unethical uses of AI. Period. We’re proud to stand alongside UMG and the artist advocates that have called upon TikTok to appropriately pay and protect the songwriters and artists who are critical to the growth and cultural relevance of the platform.”

Artist Rights Alliance: “TikTok’s failure to pay artists fairly and use AI responsibly cannot be allowed to stand. Another example of why musicians need a voice in setting the rates and rules for the use of their work.”

Downtown Music Holdings CEO Andrew Bergman: “We strive at Downtown to ensure that artists, songwriters and rights holders are equitably compensated for their creative endeavors. Over the last several years, despite the meteoric success of the platform, this has not been the case with TikTok. It’s time to recalibrate the partnership between the music industry and TikTok to re-balance the ledger.”

Hipgnosis chairman Merck Mercuriadis: “Hipgnosis has, since the beginning, been a massive advocate for the fact that we need to change where the songwriter sits in the economic equation. Should TikTok be paying higher rates? Absolutely. Every digital music and social media service has to recognize the value of music. TikTok has the ability to be a force for good in the consumption of music. Universal has done the right thing here, from the perspective of making sure that the ‘900 pound gorilla’ of our business is setting a tone that is not only in the best interest of music rights-owners, but songwriters specifically.”

Nashville Songwriters Association International’s Executive Director Bart Herbison: “NSAI supports Universal Music Group (UMG) for taking a stand to no longer license copyrights under their administrative control to the digital music platform TikTok until they agree to pay higher fair market rates to the creators of the music from which they generously profit.

Further, TikTok has invested in generative artificial intelligence (AI) companies and appears to want to flood their platform with the music their AI creates, thereby diluting payments to human songwriters and artists. They simultaneously balk at executing AI protections that other companies have agreed to. And there is concern that stronger security protocols should be in place on the TikTok platform.

Today the NSAI Board of Directors, by an unanimous vote of all 20 directors present, calls for TikTok to negotiate fair rates and address AI issues that impact human creative compensation and strengthen security measures, especially for underage users.”

Dr. Richard Burgess, President and CEO of American Association of Independent Music, says, “A2IM supports UMG’s strategic decision to withdraw its catalog from TikTok, which underscores a pressing issue within the music industry: the delicate balance between leveraging digital platforms for marketing and promotional purposes and the crucial need for fair compensation. This move brings to the fore a longstanding conundrum in the music business—the need for exposure and discoverability versus prioritizing essential revenue streams from recorded music that sustain artists’ careers and the viability of the labels that fund those careers.

Music has been foundational in building and popularizing platforms like TikTok (formerly known as Musical.ly), contributing significantly to their growth and user engagement. Yet, this investment by the music industry has not been rewarded with equitable financial returns. The tech industry has systemically underpaid artists and labels but TikTok’s payment methodology is uniquely disadvantageous. The folly here for the music industry lies in sacrificing essential revenue from recorded music for the sake of promotion, exposure, or discoverability. While marketing and promotional tools are undeniably necessary for artists to reach wider audiences, the current model has undermined the financial sustainability of artists’ careers and labels by under-monetizing the music that, in significant part, fuels the growth of these platforms.

The removal of UMG’s catalog is a stark reminder of the urgent need to reassess this value exchange. It highlights the need for a more balanced approach that does not compromise the revenue from recorded music. Robust revenue is critical for the sustenance of artists and labels. We can only hope that UMG’s move serves as a catalyst for change, advocating for fairer compensation models that acknowledge the substantial contribution of music to the success of platforms while still leveraging these spaces for effective marketing and promotional activities.

It is high time for a reevaluation of how the music industry engages with tech platforms. Let’s strive for a sustainable equilibrium where marketing and promotional tools do not detract from the vital revenue derived from recorded music. We have allowed radio to profit from more than 100 years of free recorded music and we repeated that mistake 42 years ago with MTV. We must stop sowing our seeds in barren soil. The returns artists and labels receive from TikTok are meager and insufficient to sustain their livelihoods. We must advocate for systems where music’s intrinsic value is recognized, ensuring that platforms pay fair rates that reflect music’s role in driving their success and in building these colossal corporations.

Could this be a turning point, a shift towards more equitable practices within the music industry? It certainly highlights the need for sustainable economic models that do not force music creators to choose between fame and money. Revenue from recorded music sufficient to support a middle class of creators is vital for the development and longevity of artists’ careers and the health of the labels that support them. Such a recalibration would lead to a more sustainable and prosperous music ecosystem, where creators are fairly compensated for the value they create for digital platforms.”

“Universal Music has opted for a radical solution, withdrawing its entire catalogs from the platform for non-respect of works and their remuneration. Because of their position, independent labels like Because Music don’t have the industrial power and desire to stand up to a digital giant like TikTok. But we do share the desire that the app and social networks in general should accept the rules that have been discussed with their predecessors. This virtuous evolution must now be applied to TikTok, because it’s vital for both camps. Because, if TikTok wants to make a living from music, it has to respect it,” writes Emmanuel de Buretel, president of French indie label Because Music, as part of an op-ed in Le Monde.