ByteDance-owned TikTok has called Universal Music Group (UMG) greedy after it threatened to pull songs, including those by Taylor Swift, Billie Eilish and Drake, from the hit short-video platform due to disagreements over compensation for artists.
TikTok said that UMG “has put their own greed above the interests of their artists and songwriters”. It added that the removal of songs, slated to start on Thursday, would see UMG lose a platform with “a billion users that serves as a free promotional and discovery vehicle for their talent”.
In an open letter on Wednesday, the world’s largest music company blamed TikTok for attempting to broker a deal “worth less than the previous deal, and far less than fair market value”, alleging that TikTok had proposed a rate only “a fraction of” that paid by social media peers.
“Despite its massive and growing user base, rapidly rising advertising revenue and increasing reliance on music-based content, TikTok accounts for only about 1 per cent of our total revenue,” UMG said. “Ultimately, TikTok is trying to build a music-based business, without paying fair value for the music.”
The spat between the two groups has cast a shadow over TikTok’s tried-and-tested ability to sign up new users by allowing them to lip-synch to popular songs. TikTok’s growth was accelerated by its 2017 acquisition of US music and karaoke app musical.ly, which was later merged with TikTok.
TikTok initially featured short videos no longer than 15 seconds, later extended to up to 10 minutes, although most content on the platform is no longer than a minute. This makes it different from other music streaming apps that allow users to play full songs.
TikTok users have music capped at 60 seconds in their content creations, hence it believes the rate it pays for licensing should be lower, according to a report by Agence France-Presse that cited an anonymous person close to the situation.
The existing licensing deal between TikTok and UMG is set to expire on January 31. TikTok has similar deals with Sony and Warner Music. TikTok says that it “has been able to reach ‘artist-first’ agreements with every other label and publisher”.
Apart from the issue of compensation, TikTok and UMG have a difference of opinion on the impact of artificial intelligence (AI) on the short-video platform. TikTok is flooded with AI-generated audio and visual effects, and as such, UMG alleges it virtually supports artists to be replaced by AI.
“TikTok … is demanding a contractual right which would allow this content to massively dilute the royalty pool for human artists,” it said. TikTok has refuted all of UMG’s allegations, calling them a “false narrative and rhetoric”.
UMG has also called on TikTok to deal more rigorously with infringements of musical and artistic copyright, and to step up content moderation.
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