In a fiery open letter titled “Why we should take a break from TikTok“, published on Tuesday (30), UMG – the largest music company in the world – accused the TikTok of trying to “intimidate” and “coerce” the company into “accepting a deal that is worth less than the previous deal, much less than fair market value and does not reflect its exponential growth.”
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TikTok, owned by the Chinese company ByteDance, is a social media app that allows users to create short videos, most of which are soundtracked with sound effects and licensed music.
UMG's dominance over popular music cannot be overstated, with the company owning the rights to artists such as the Beatles, Bob Dylan, Elton John, Drake, Sting, The Weeknd, Kendrick Lamar, SZA, Ariaon Grande, Justin Bieber, Adele, U2, Coldplay, Post Malone and more. It is the only music company to have nine of the top ten albums on the Billboard 200 music chart at once, and has achieved this feat four times.
If UMG does not reach an agreement with TikTok, all of its music will be removed from the service once the contract expires on Wednesday, a UMG spokesperson confirmed to Reuters.
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In the open letter, UMG claimed that TikTok represents “only about 1% of our total revenue,” which they say is evidence of “how little TikTok compensates artists and songwriters despite its massive user base and rapidly growing advertising revenue, rapidly increasing reliance on music-based content.”
The music company alleged that during negotiations for a new deal, TikTok “proposed to pay our artists and songwriters at a rate that is a fraction of the rate that similarly situated social platforms pay.”
When negotiations stalled, UMG alleges that TikTok attempted to “bully” the company by “selectively removing music from certain of our developing artists” while keeping bigger stars on the platform.
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“TikTok’s tactics are obvious: using its platform power to harm vulnerable artists and trying to intimidate us into giving in to a bad deal that undervalues music and leaves artists, songwriters and their fans disappointed,” UMG wrote.
In a fiery response, TikTok accused UMG of having “placed its own greed above the interests of its artists and songwriters.”
“Despite Universal’s false narrative and rhetoric, the fact is that they have chosen to walk away from the powerful support of a platform with over a billion users that serves as a free promotion and discovery vehicle for their talent,” the company said .
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The crisis comes as TikTok explores more music creation and artificial intelligence. It launched TikTok Music last year in some countries as a competitor to Spotify and Apple Music, and is testing a feature called “AI Song” that allows users to create songs using suggestions.
UMG accused TikTok of “allowing the platform to be flooded with AI-generated recordings.” By developing tools that allow users to experiment with AI music creation, TikTok is “sponsoring the replacement of artists with AI,” UMG said, claiming that the only means it had to seek removal of infringing content on TikTok was a “monumentally complicated and inefficient process that amounts to the digital equivalent of Whac-a-Mole.”
TikTok has similar agreements with music companies including Sony and Warner Music – something the company highlighted in its statement on Tuesday – but whether these companies share any of UMG's concerns remains to be seen.
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