Universal Music Group — which owns the rights to superstars including Taylor Swift, Olivia Rodrigo, Billie Eilish and Drake — threatened to revoke TikTok’s license on Wednesday after the two companies failed to reach a deal on key issues such as artist compensation.
The worlds largest music company wants TikTok to increase payments to its artists, as well as to address the growing trend of using artificial intelligence to create music on the Chinese-owned video-sharing app.
Revoking TikTok’s license, which expires Wednesday, could be a devastating blow for the app as roughly 60% of the videos posted to its platform include music.
“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.
“As our negotiations continued, 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.”
The company did not say how much it was paid in its previous deal or what increase it is seeking from TikTok, which has an estimated 1.5 billion monthly users.
TikTok shot back early Wednesday with its own scathing response, accusing the music company of putting their own greed above the interests of artists and songwriters.
UMG said TikTok only accounts for 1% of its advertising revenue despite its musicians representing eight out of 10 of the most popular bands and singers on the social media site last year.
In an open letter to its artists Tuesday, titled “Why We Must Call Time Out on TikTok,” UMG wrote: “Ultimately TikTok is trying to build a music-based business, without paying fair value for the music.”
The company added that it was concerned about the growth of artificial intelligence tools used in TikTok videos and their effect on intellectual property, while also griping about the amount of copyright infringement. It also noted the “tidal wave of hate speech, bigotry, bullying and harassment” on the site.
The record giant also alleged that TikTok attempted to intimidate it by “selectively removing the music of certain of our developing artists,” while keeping “audience-driving global stars.”
Although TikTok has not responded specifically to the allegation, it did accuse the label of false narrative and rhetoric and pointed out it was able to sign deals with other major music labels in a statement it posted Tuesday on X.
The company signed a music licensing deal with Warner Music Group, which represents Madonna, Lizzo and Ed Sheeran, last year.
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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 added.
