Universal Music Group to Remove Catalog from TikTok Over Royalty Dispute

Universal Music Group (UMG), home to renowned artists such as Taylor Swift, Billie Eilish, and Ariana Grande, is making a significant move by planning to withdraw its song catalog from TikTok.

TikTok is taking significant steps to enhance transparency on its platform and empower researchers in Europe.

Pulling Out Songs

This decision follows unsuccessful negotiations with ByteDance, TikTok's parent company, regarding royalty agreements. UMG will not renew its existing arrangement with TikTok, leading to the cessation of content licensing for both TikTok and its dedicated music service, TikTok Music.

The official statement from UMG points to a fundamental disagreement with TikTok, accusing the platform, which reportedly amassed around $20 billion in ad revenue last year, of attempting to build a music-based business without paying fair value for artists' music.

This decision sheds light on the complex dynamics between major music labels and digital platforms, underscoring the ongoing challenges in establishing equitable terms for music streaming and distribution in the contemporary digital landscape.

TechCrunch reported that the label asserted that TikTok's proposed compensation for artists and songwriters falls significantly below the rates offered by similar major social platforms.

Despite TikTok's expansive user base, surging advertising revenue, and growing reliance on music-centric content, the platform contributes only about 1% to the label's total revenue.

Copyright Violations

The disagreement with TikTok revolves around payments for AI-generated recordings utilizing UMG properties. Additionally, UMG claims that TikTok has been sluggish in taking appropriate measures to promptly remove content violating the label's copyright.

According to Rolling Stone, TikTok's approach suggests an attempt to establish a music-focused business without appropriately compensating for the value of the music it utilizes.

TikTok's existing agreement with UMG, which originated in 2021, encompasses recorded music from artists affiliated with UMG's labels and songwriters linked to its Publishing Group. This contractual arrangement included provisions for experimentation with innovative features.

For instance, users were granted the ability to integrate clips from UMG's extensive music catalog, featuring artists like Bad Bunny, SZA, Drake, Kendrick Lamar, Harry Styles, Justin Bieber, Adele, U2, and Elton John.

The discord with UMG coincides with TikTok's intensified focus on music creation and curation, as reported by Variety, underlining a shifting emphasis within the platform towards a more prominent role in the music industry.

TikTok is strategically positioning TikTok Music, introduced last year in select regions, as a formidable competitor to platforms like Spotify and Apple Music. The platform is also experimenting with an "AI Song" feature, leveraging AI to generate songs.

While TikTok has demonstrated a willingness to negotiate with certain labels under favorable terms, engaging in ongoing talks with Warner Music Group, Sony Music Entertainment, and UMG for a share of ad revenues, it has not hesitated to assert its influence strategically.

In a noteworthy move last February, TikTok conducted a test in Australia, temporarily removing music from major record labels for select users to assess the impact on user engagement.

More recently, TikTok is actively pursuing exclusive distribution deals with musicians for ByteDance's SoundOn service, a platform that directly serves TikTok and various music streaming services.

Additionally, the introduction of the Elevate program signals TikTok's commitment to identifying and promoting emerging talents in the music industry. These initiatives underscore TikTok's multifaceted approach as it continues to evolve its role within the music and social media landscape.