TikTok may find itself without the music of thousands of Universal Music Group (UMG) artists including Taylor Swift after talks to extend a licensing deal hit an impasse.
UMG, one of the world’s dominant music publishers, issued an open letter on Tuesday, excoriating Chinese-owned TikTok for offering unfair terms and threatening the livelihood of artists with its embrace of artificial intelligence.
The social video platform responded by accusing UMG of putting greed before the interests of artists and songwriters.
The existing terms between UMG — which counts Swift and Drake among the performers signed to its labels — and TikTok expire on Wednesday and, absent a new agreement, UMG could pull its artists’ content from the platform.
While TikTok accounts for only 1% of UMG’s sales, its renewal offer was “less than the previous deal, far less than fair market value and not reflective of their exponential growth”, UMG said.
“Despite Universal’s false narrative and rhetoric, 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 said in a statement.
TikTok’s adoption of artificial intelligence tools to generate content, including its own Creative Assistant, is a major threat to artists’ rights, according to UMG. The social platform has demanded “a contractual right which would allow this content to massively dilute the royalty pool for human artists, in a move that is nothing short of sponsoring artist replacement by AI”, UMG said in its letter.
“It is difficult to estimate whether negotiations might be salvaged,” Citi analysts wrote in a note after the companies’ public exchange.
“Strategically, we think this is the correct stance for UMG to take: at the best it secures better terms, at worst it is a powerful signal that it is protecting artists’ interests.”
UMG said TikTok pulled the music of some lesser-known artists it represents from the platform — while keeping high-profile stars aboard — as an intimidation play during negotiations.
