The world's largest music industry major Universal Music Group (UMG) and TikTok have failed to reach an agreement. In the absence of an agreement, UMG announced on Tuesday January 30 the withdrawal of its songs from the social network.
In an open letter, Universal accused TikTok of "trying to build a business based on music, without paying fair value for the music." The two sides discussed the terms of a new deal, with the existing contract set to expire on Wednesday. But the agreement was not renewed.
In a statement, TikTok said it was “sad and disappointing that Universal Music Group put its own greed ahead of the interests of its artists.”
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Among the issues raised during the negotiations were "appropriate compensation" for artists and songwriters, online security for users, as well as protecting artists from the harms of artificial intelligence, the letter added. UMG (which represents Taylor Swift and The Weeknd).
But as negotiations progressed, “TikTok tried to intimidate us into accepting a deal worth less than the previous deal, well below fair market value and not reflective of their growth exponential,” Universal said.
1% of Universal's turnover
Major record labels receive royalties from streaming platforms and social media.
The giant Universal, however, said that TikTok was offering to pay "a rate that is only a fraction of the rate paid by major platforms in a similar situation."
Calling Universal's statements "false", TikTok believes that the record company has "chosen to turn away from the powerful support of a platform that has more than a billion users and which serves as a vehicle for promotion and free discovery for their talents.
Although TikTok has a large number of users, it only represents around 1% of Universal's total revenue, UMG further denounced in its letter.
Universal notes other issues such as the presence of a large number of AI-generated recordings on the TikTok platform.
With AFP
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