Universal Music threatens to pull songs from TikTok over payment terms

Universal Music Group (UMG) is threatening to pull all of its music from TikTok today following a breakdown in negotiations over royalties, the company wrote in an open letter. That would mean TikTok creators would lose access to songs from stars including Taylor Swift, Billy Eilish, The Weeknd, Drake and others. 

With UMG's deal with TikTok set to expire, the sides have reportedly been in negotiations for the past year. Such deals are worth billions annually to music publishing firms and are typically negotiated every few years. Universal is the world's largest record label, and if does pull it's music from TikTok, it would be the first time this has happened in recent memory.

Universal said TikTok wanted to pay a "fraction" of the rate paid by other social media sites. "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." 

In its own post, TikTok said that it serves as a valuable marketing tool for artists and publishers. "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 also benefits greatly from access to Universal's catalog and being cut off from access to ultra-popular artists like Taylor Swift would be a blow to creators and users. TikTok's Chinese parent ByteDance has more than 3 billion monthly active users and made $29 billion in revenue in a single quarter ending June 2023, according to The Financial Times. Warner Bros. Music, the number three record label behind Sony Music and UMG, recently struck a deal with TikTok. 

Universal said it does "not underestimate what this will mean for artists and their fans" but that it will not shirk its responsibilities. "TikTok’s tactics are obvious: use its platform power to hurt vulnerable artists and try to intimidate us into conceding to a bad deal that undervalues music and shortchanges artists and songwriters as well as their fans." The company added that payments from TikTok amount to "only about 1 percent of our total revenue."

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