TikTok and UMG’s current contract is set to expire today with no details of a new contract coming anytime soon. The two sides could not reach an agreement on royalties for artist streams.
Universal Music Group announced in an open letter early Wednesday that it’s pulling its extensive music library from TikTok after the parties failed to reach a new agreement on royalties for artists and songwriters.
UMG came to the decision citing the proposed deal’s unfair compensation for its artists. TikTok and UMG’s current contract is set to expire on Jan. 31, which means that music from popular artists like Drake, Beyoncé, Justin Bieber, and SZA will disappear from the platform by the end of the day.
“TikTok proposed paying our artists and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay,” UMG said in its statement.
Before UMG posted its open letter early this morning, TikTok released a statement saying, “It is sad and disappointing that Universal Music Group has put their own greed above the interests of their artists and songwriters.” The short-form video app stated that it has been able to reach agreements with every other label and publisher that prioritizes the artists and songwriters on its platform.
“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 its statement.
Refuting this claim, UMG noted that it’s been able to reach similar deals with every other social media platform. The music publisher also accused TikTok of attempting to bully it into signing a contract that would dish out fewer royalties to artists and songwriters than the previous one did. UMG reported that TikTok accounts for only 1% of its total revenue.
The pressure point in the negotiations came from TikTok and UMG’s inability to reason on payments for AI-generated content that features UMG music. The music publisher also alleged that TikTok hasn’t been taking the appropriate and swift steps to remove content that violates its copyrighted works.
TikTok hasn’t directly responded to UMG’s open letter, and it’s unclear if the companies will return to negotiations to solidify a deal any time soon.
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