The breakdown of contract negotiations between the two companies has led to the removal of UMG’s roster of artists from the social media platform, Reuters reported Thursday (Feb. 1).
UMG claims that TikTok has been unwilling “to appropriately compensate artists and songwriters, protect human artists from the harmful effects of” artificial intelligence and “address online safety issues for TikTok’s users,” according to the report.
The firm is requesting TikTok to compensate artists at a rate comparable to what other social media platforms pay, the report said. TikTok only accounts for 1% of UMG’s total revenue, despite music being a core part of the app’s experience, UMG said in an open letter.
UMG also expressed concerns about the platform being flooded with recordings generated by AI, “which dilutes the royalty pool for artists,” per the report. Additionally, the company raised issues regarding “problematic content.”
TikTok, on the other hand, accused UMG of prioritizing greed over the interests of their artists and songwriters, according to the report.
The social video platform argued that UMG’s “actions are not in the best interests of artists, songwriters and fans,” the report said. It claimed to have reached “‘artist-first’ agreements with every other label and publisher,” highlighting UMG’s departure “from its powerful promotional platform that reaches more than a billion users.”
The removal of UMG’s music from TikTok has caused “shock” among young users who rely on the platform’s songs for background audio in their videos, the report said.
Wall Street analysts praised UMG for its decision, stating that the label “had little to lose and much to gain,” per the report. They estimated that the financial impact of pulling off TikTok will be minimal for UMG, with potential losses being “offset by users listening to music on competitor apps.”
UMG has been pushing for greater streaming payouts from leading platforms. During an earnings call in October, CEO Lucian Grainge said the company was “frustrated” with the progress from major players in the space in regard to making the payment structures more “artist-centric.”