The Impact of Universal Music Group's Removal of Music from TikTok
Universal Music Group
Universal Music Group (UMG) made headlines this week by letting its licensing agreement with TikTok expire on January 31st. Consequently, music from its artists and songwriters, including popular names like Drake, The Weeknd, Taylor Swift, Bad Bunny, Adele, and Billie Eilish, has been pulled from TikTok and TikTok Music.
Reasons Behind UMG's Removal of Music from TikTok
In an open letter, UMG expressed concerns about TikTok's compensation practices, stating that the platform pays artists and songwriters “a fraction of the rate” compared to other similarly situated social media platforms. The label also raised issues regarding AI-generated recordings and the development of tools that promote AI music creation, which it believes is “sponsoring artist replacement by AI.”
TikTok responded with its own statement, accusing UMG of putting its own "greed above the interests of their artists and songwriters.”
TikTok's Turbulent Relationship with Music Labels
The relationship between TikTok and music labels has been rocky, especially since TikTok's surge in popularity in recent years. Music labels have been pushing for fairer compensation for licensing, while TikTok has aimed to retain a larger share of its revenue. TikTok had previously conducted a test in Australia, limiting access to commercial music to understand the impact of a music-free TikTok on usage.
Impact on TikTok and Creators
While both parties benefit from the partnership, TikTok will feel the greater impact due to UMG's significant size and influence. UMG accounts for one-third of the music today, and TikTok's DNA is deeply intertwined with music.
UMG's artists and songwriters will miss out on discovery opportunities, affecting emerging talents more than established artists. However, for UMG, revenue from TikTok currently represents only a small portion of its overall revenue, so the direct financial impact may be limited.
On the creator side, the removal of music from prominent artists not only prevents them from uploading videos with popular songs but also mutes previously posted videos, resulting in frustration. Creators who heavily rely on music for their content, such as dancers, lip-syncers, music reviewers, playlist curators, and those who use their favorite songs as backgrounds for their videos, will be impacted the most.
Creators have other music options, including music from TikTok's other music partners like Warner Music Group and its Commercial Music Library. However, these options do not fully compensate for the absence of UMG's extensive catalog. This could mean creators who rely on music from these artists and songwriters for their content might migrate to other platforms like Instagram to create and publish, at least temporarily. They might even pivot to different content, as was seen with creators during the Hollywood strike, and also reconsider their content strategy around music going forward.
A Likely Resolution in the Future
Disputes between music labels and social media platforms are not uncommon. YouTube, Meta, and others have faced similar challenges in the past with both large and smaller labels. If history is any indication, UMG and TikTok will reach a resolution and come to an agreement eventually. However, this development could prompt TikTok's other music partners to reconsider their agreements.
Additionally, this situation might lead creators to question TikTok's monetization practices even more. If TikTok isn't compensating some of the biggest names in the world, is it compensating its core user base appropriately, too, especially with the forthcoming impact of its emerging AI features on creators' own livelihoods?
