What Will Happen to TikTok Without Universal Music Group?

Big news hit the music and social media world recently. Universal Music Group (UMG), which represents major music artists like Taylor Swift, Bad Bunny, Billie Eilish, Drake, The Weeknd, and more, has announced that it is pulling its music from TikTok. The reason? The music company couldn't agree on a deal regarding royalties with ByteDance, the company that owns TikTok.

Universal's contract with TikTok was due to end on Wednesday, and no new deal was established. As a result, the label declared that it would withdraw its licenses, which are the legal authorizations to utilize its music. Shortly after, TikTok confirmed that it commenced the removal of Universal's extensive collection of songs from its platform.

According to Universal Music Group's open letter, TikTok has grown into a substantial social platform largely thanks to the music supplied by Universal's artists and songwriters. Music is a crucial aspect of the TikTok experience, with a majority of its content being music-based, surpassing any other leading social platform. Universal's contract with TikTok ended on Jan. 31, but the renewal discussions originally centered around three key issues: fair pay, protection from AI harm, and user safety.

“Ultimately TikTok is trying to build a music-based business, without paying fair value for the music.”

Universal Music Group via open letter

Here's a bit of context: According to Fortune, "TikTok has upped its rates and is reportedly pulling in somewhere in the region of $20 billion in annual ad revenue — around 10 times as much as it was in early 2021 when UMG signed its TikTok deal."

UMG believes that TikTok is trying to build a business that heavily relies on music without paying a fair price for the music it uses from artists. Additionally, UMG claims that TikTok tried to pay its artists and songwriters considerably less than major social platforms usually pay. Per UMG, 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."

UMG also highlighted how TikTok, despite its vast user base and soaring ad revenue, contributes a mere 1% to the music company's total revenue.

After UMG released its open letter, TikTok fired back with its own statement, which noted that Universal Music Group appears to be prioritizing its own financial interests over the needs of its artists and songwriters. Countering Universal's narrative, TikTok claims that Universal has chosen to distance itself from the robust support offered by a platform with over a billion users, which "serves as a free promotional and discovery vehicle for their talent."

TikTok also claims to have successfully established "artist-first" agreements with every other music label and publisher. "Clearly, Universal's self-serving actions are not in the best interests of artists, songwriters and fans," the social media company stated.

In response to Universal's pullouts, TikTok was forced to delete the company's songs from its music library of over 1 million songs, rendering them inaccessible for new videos. Regarding the older videos that already included Universal's music, TikTok started to "mute" these clips on Thursday, essentially erasing all audio, and leaving users with silent videos. This was the case with videos from famous personalities like Kylie Jenner and Dwayne Johnson (known as The Rock), among countless others. Many of these muted videos now feature messages such as "This sound isn't available."

In the official profile pages for artists like Taylor Swift, the sections once teeming with a multitude of songs for users to feature became largely empty. However, some clips or user-generated mixes might remain in some instances.

The complete removal process is predicted to last for several days at the very least. TikTok did not specify the exact number of videos that would be impacted by Universal's withdrawal. However, given the vast reach of the platform, it could feasibly be in the millions. Not surprisingly, many TikTok content creators have voiced their anger and frustration on social media.

In UMG's version of the story, the disagreement was primarily about payments for AI-generated recordings using UMG's music. The company suggests that TikTok was not doing enough to promptly remove content that breached UMG's copyright rules.

So, what does this mean for TikTok and its future? The platform is synonymous with short, snappy music clips. The loss of UMG's catalog could be a substantial blow. However, some users, including Swift fan and TikTok creator Madeleine Macrae, see a potential positive impact. “I feel like a silver lining to this is that smaller or independent artists can have their chance to go viral,” Macrae said.

What remains to be seen is whether one party will back down. Will TikTok agree to pay more, will UMG realize it's not worth losing the exposure from one of the largest social platforms in the world, or will they both stand firm?