Universal Music Group and TikTok have announced a new multi-dimensional licensing agreement following a standoff between the two companies concerning royalties and AI.
The new agreement is designed to deliver “significant industry-leading benefits” for UMG’s global family of artists, songwriters and labels and will return their music to TikTok’s billion-plus global community.
UMG began pulling its music from TikTok earlier this year after the old contract expired. The two companies have been involved in a months-long standoff over the royalties TikTok paid to UMG’s artists, culminating in UMG releasing an open letter to TikTok titled, ‘Why We Must Call Time Out on TikTok’.
The letter highlighted that UMG had been pressing TikTok on three critical issues: appropriate compensation for its artists and songwriters, protecting human artists from the harmful effects of AI and online safety for TikTok’s users.
It read: “With respect to the issue of artist and songwriter compensation, TikTok proposed paying our artists and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay. 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% of our total revenue. Ultimately TikTok is trying to build a music-based business, without paying fair value for the music.”
UMG claimed that on AI, TikTok was allowing the platform to be flooded with AI-generated recordings – as well as developing tools to enable, promote and encourage AI music creation on the platform itself – and then demanding a contractual right which would allow this content to massively dilute the royalty pool for human artists, “in a move that is nothing short of sponsoring artist replacement by AI.”
UMG also raised concerns over TikTok making little effort to deal with the vast amounts of content on its platform that infringe its artists’ music, claiming it offered “no meaningful solutions to the rising tide of content adjacency issues, let alone the tidal wave of hate speech, bigotry, bullying and harassment on the platform. The only means available to seek the removal of infringing or problematic content (such as pornographic deep fakes of artists) is through the monumentally cumbersome and inefficient process which equates to the digital equivalent of ‘Whack-a-Mole.’”
UMG claimed that when it proposed that TikTok take similar steps as its other platform partners to try to address these issues, TikTok responded first with indifference, and then with intimidation.
“TikTok attempted to bully us into accepting a deal worth less than the previous deal, far less than fair market value and not reflective of their exponential growth,” stated UMG. “How did it try to intimidate us? By selectively removing the music of certain of our developing artists, while keeping on the platform our audience-driving global stars.
“TikTok’s tactics are obvious: use its platform power to hurt vulnerable artists and try to intimidate us into conceding to a bad deal that undervalues music and shortchanges artists and songwriters as well as their fans. We will never do that.”
UMG stated in the open letter that it will always fight for its artists and songwriters and stand up for the creative and commercial value of music.
“We have an overriding responsibility to our artists to fight for a new agreement under which they are appropriately compensated for their work, on a platform that respects human creativity, in an environment that is safe for all, and effectively moderated.We honour our responsibilities with the utmost seriousness. Intimidation and threats will never cause us to shirk those responsibilities.”
The new joint agreement addresses these concerns and marks a new era of strategic collaboration between the two organisations, built on a shared commitment to help UMG’s artists and songwriters achieve their creative and commercial potential.
Fans on TikTok can look forward to the return of UMG’s recorded music and publishing catalogues and once again enjoy creating videos using music from some of the world’s biggest artists and songwriters as well as emerging talent.
By harnessing TikTok’s technology, marketing and promotional capabilities, UMG and TikTok will deliver improved remuneration for UMG’s songwriters and artists, new promotional and engagement opportunities for their recordings and songs and industry-leading protections with respect to generative AI.
In addition, TikTok and UMG will work together to ensure AI development across the music industry will protect human artistry and the economics that flow to those artists and songwriters.
TikTok is also committed to working with UMG to remove unauthorised AI-generated music from the platform, as well as tools to improve artist and songwriter attribution.
“We are delighted to welcome UMG and UMPG back to TikTok,” said Ole Obermann, TikTok’s global head of music business development.
“In particular, we will work together to make sure that AI tools are developed responsibly to enable a new era of musical creativity and fan engagement while protecting human creativity”.
Michael Nash, Chief Digital Officer and EVP, Universal Music Group, added: “Developing transformational partnerships with important innovators is critical to UMG’s commitment to promoting an environment in which artists and songwriters prosper.
“We’re gratified to renew our relationship with TikTok predicated on significant advancements in commercial and marketing opportunities as well as protections provided to our industry-leading roster on their platform. With the constantly evolving ways that social interaction, fan engagement, music discovery and artistic ingenuity converge on TikTok, we see great potential in our collaboration going forward.”
As part of the agreement, both organisations will work together to realise new monetisation opportunities utilising TikTok’s growing e-commerce capabilities and will work together on campaigns supporting UMG’s artists across genres and territories globally.
TikTok will continue to invest significant resources into building artist-centric tools that will help UMG artists realise their potential on the growing platform.
Tools including ‘Add to Music App’, enhanced data and analytics and integrated ticketing capabilities will benefit artists, both financially and in building their global fan bases using TikTok’s scale and engaged community, while strengthening online safety protections for artists and their fans.
UMG and TikTok are now working to return music by artists represented by Universal Music Group and songwriters represented by Universal Music Publishing Group to TikTok in due course.
“This new chapter in our relationship with TikTok focuses on the value of music, the primacy of human artistry and the welfare of the creative community,” said Sir Lucian Grainge, chairman and CEO, Universal Music Group.
“We look forward to collaborating with the team at TikTok to further the interests of our artists and songwriters and drive innovation in fan engagement while advancing social music monetisation.”
Shou Chew, CEO of TikTok, added: “Music is an integral part of the TikTok ecosystem and we are pleased to have found a path forward with Universal Music Group. We are committed to working together to drive value, discovery and promotion for all of UMG’s amazing artists and songwriters, and deepen their ability to grow, connect and engage with the TikTok community.”