UMG Ends Partnership with TikTok Amidst Royalty Payment Disagreements

Universal Music Group (UMG), the renowned label boasting popular artists like Taylor Swift, Billie Eilish, and Ariana Grande, ends its partnership with TikTok amidst royalty payment disagreements. The partnership ends starting midnight today. The decision comes after failed negotiations with ByteDance, TikTok’s parent company, over fair compensation for artist royalties.

The existing agreement between UMG and TikTok, scheduled to conclude on January 31, will not be renewed. UMG intends to cease licensing content to both TikTok and its music-focused service, TikTok Music. In a press release, UMG accused TikTok of attempting to establish a “music-based business without paying fair value for [artists’] music.”

The label expressed dissatisfaction with TikTok’s proposed payment rates for artists and songwriters, which it claims are significantly lower than other major social platforms. Despite TikTok’s substantial user base, rapid ad revenue growth, and increasing reliance on music-based content, UMG highlighted that TikTok only contributes about 1% to its total revenue.

UMG Ends Partnership with TikTok Amidst Royalty Payment Disagreements

TikTok responded to UMG’s decision, stating, “It’s sad and disappointing that Universal Music Group has put their greed above the interests of their artists and songwriters.” The platform emphasized its role as a powerful promotional and discovery tool for artists, with over a billion users.

UMG alleged disagreements with TikTok on payments for AI-generated recordings using UMG properties and criticized TikTok for not promptly removing content that violated the label’s copyright.

The dispute arises as TikTok strengthens its focus on music creation and curation, positioning TikTok Music as a serious competitor to platforms like Spotify and Apple Music. TikTok has been piloting an “AI Song” feature that uses artificial intelligence to generate songs based on user prompts.

UMG’s current contract with TikTok, established in 2021, covers recorded music from UMG’s labels and associated songwriters. The agreement allowed experimentation with new features, such as incorporating clips from UMG’s extensive catalogue of artists like Bad Bunny, SZA, Drake, Kendrick Lamar, Harry Styles, Justin Bieber, Adele, U2, and Elton John.

This development follows TikTok’s efforts to engage with labels for favourable terms, including talks with Warner Music Group and Sony Music Entertainment. Despite TikTok’s willingness to negotiate, the platform has a history of taking bold actions, as seen when it removed major record company music for a subset of users in Australia last February.

Amid these developments, TikTok continues its initiatives, seeking exclusive distribution deals for ByteDance’s SoundOn service and launching the Elevate program to identify emerging talents in the music industry.

See Also: TikTok Takes On YouTube By Testing 30-Minute Video Uploads