Universal Pulls TikTok Into its Streaming Fight
The music industry titan is in a war of words with the popular app after failing to reach a licensing deal.
Sign up for smart news, insights, and analysis on the biggest financial stories of the day.
Can’t they just settle this with a cage fight the way they do in Big Tech?
Universal Music Group, one of the world’s biggest music labels whose artists include Taylor Swift, Drake, and Adele, released an extraordinary public statement saying it couldn’t reach a licensing agreement with TikTok, even accusing the social-media platform of trying to “bully” UMG into a worse deal. TikTok released a similarly feisty statement accusing UMG of putting “their own greed above the interests of their artists and songwriters.” How long until the official diss track is released?
Music has been a big part of TikTok’s success, starting with the larval stage of its lifecycle. TikTok’s parent company ByteDance in part forged TikTok out of a lip-syncing app called Musically, which ByteDance acquired in 2017. But while TikTok grew, UMG faced a world where new tech services were quickly eroding the value of licensed songs.
UMG has already made noise about shaking up its relationship with music streaming companies like Spotify and regulatory winds may shift in its favor, but with this bold stand-off against TikTok, it’s pulling the wider world of social media into the mix:
- UMG said it has pressed TikTok on three issues: artist compensation, the effects of AI, and TikTok user safety. UMG said TikTok only offered to pay artists a “fraction” of what “similarly situated platforms” offer — exactly what platform has the same clout as TikTok is a mystery.
- UMG added that TikTok licensing normally represents 1% of its total revenue, and said that TikTok not only tried to low-ball the label, it also scrubbed the music of lesser-known artists from the platform as a sort of hostage-taking tactic.
Christine Osazuwa, chief strategy officer at music events company Shoobs, told The Daily Upside it will be hard for UMG to enforce its threat to withdraw from TikTok. “While in theory UMG can remove their music, issue takedown notices for tracks and deploy other methods to protect their rights, controlling whether or not their artists leak their own music or users continue to create sped up and slowed down versions of tracks may prove more challenging,” Osazuwa said.
I’ll Make You a TikTok Stahh: TikTok didn’t address UMG’s accusations specifically, but it did say Universal had chosen to “walk away” from a “platform with well over a billion users that serves as a free promotional and discovery vehicle for their talent.” That sounds too much like someone asking you to work “for the exposure,” which doesn’t normally go down great with creative-industry types. Still, Osazuwa believes smaller artists may still post their work straight to TikTok. “For better or worse, I’m sure they know they likely were making very little from the platform regardless but recognize the power of marketing,” she said.