Major record labels and TikTok are butting heads again as Universal Music Group, which represents superstars like Taylor Swift, Drake and Ariana Grande, penned an open letter yesterday (Jan. 30) threatening to remove its artists from the short video platform. Universal said if the two companies cannot come to an agreement today, which is the last day of its licensing agreement with TikTok, the label will pull its artists’ music from the app.
Music is at the heart of TikTok’s success. About 60 percent of TikTok videos include music. Universal argued in the letter its artists are not fairly compensated by TikTok, which affects its revenue. Universal alleged TikTok pays its musicians a “fraction” of what other social platforms pay, not naming any specific platforms.
“Today, as an indication of how little TikTok compensates artists and songwriters, despite its massive and growing user base, rapidly rising advertising revenue and increasing reliance on music-based content, TikTok accounts for only about 1 percent of our total revenue,” Universal said in the open letter.
The record label also criticized TikTok’s inability to properly address how its users are making music with artificial intelligence (A.I.) that replicates the voices and sounds of major artists like Drake and The Weeknd. Instead, TikTok is encouraging A.I. music creation on the platform, Universal alleged.
TikTok responded with a four-sentence statement, saying Universal “has put their own greed above the interests of their artists and songwriters.”
“Despite Universal’s false narrative and rhetoric, 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,” TikTok said in a statement yesterday.
The clash highlights the ongoing tension between TikTok and the traditional music and entertainment industry at large. TikTok has become an essential platform for artists to organically build fanbases and followings. The platform has even revived older music through viral trends that bring those songs back onto the charts.
The legality of music and other cultural content being brought to TikTok has been murky at times. A trend that has caught the attention of many is when users post entire movies cut into minutes-long clips to the app without permission from the studios. TikTok is also increasingly filled with A.I.-generated music that mimics famous singers.
“Ultimately TikTok is trying to build a music-based business, without paying fair value for the music,” the Universal letter said.
TikTok has been attempting to disrupt the music industry in ways beyond helping artists go viral. It recently created its own distribution platform called SoundOn, where independent artists can upload music directly to TikTok and earn royalties from it. The move sparked speculations whether TikTok will eventually create its own label, though the company has said it’s not its intention with SoundOn.
“I think we can coexist with record labels and publishers and do what we’re doing with SoundOn, and I think it can be one happy value-creating family,” Ole Obermann, global head of music business development and IP rights at TikTok’s parent ByteDance, told Business Insider last year.