Have you noticed some sounds were muted or completely deleted on TikTok this past week while you were scrolling through your algorithm?
Why is that?
Universal Music Group, a private music label from The Netherlands recently ended their licensing contract with TikTok. UMG represents major artists like Taylor Swift, Ariana Grande, Drake, and Harry Styles.
TikTok is widely known as a platform to produce short-form videos with popular sounds and music. In recent years, TikTok has been able to help promote songs from music artists on any level to be discovered and go ‘viral.’
According to Business Insider, “Songs that trend on TikTok often end up charting on the Billboard 100. 67% of the app’s users are more likely to seek out a trendy song on music-streaming services after hearing them on Tiktok.” MRC Data was reported after a study was conducted on music analytics via TikTok streams.
So why is this important?
Many artists have gained popularity and quickly rose to fame after being ‘discovered’ and going viral on social media. Take a look at Noah Kahan for an example. Noah released his album Stick Season in 2020. However, in 2022 he went viral on TikTok which allowed him to jump to number 14 on the Billboard 200 charts. Would Noah have been recognized if it wasn’t for TikTok promoting his music?
That is the biggest question after the news from UMG and TikTok that has many artists fearful.
Noah put out a statement shortly after the news of UMG’s expired contract with TikTok came out saying “I won’t be able to promote my music on TikTok anymore… I’ll probably be OK, right? I’ll probably land on my feet, right? Right?” Artists are beginning to find new ways of promoting their music, turning to Instagram or X.
UMG wrote an open letter to the Artist and Songwriter community.
“The terms of our relationship with TikTok are set by contract, which expires Jan. 31, 2024. In our contract renewal discussions, we have been pressing them on three critical issues — appropriate compensation for our artists and songwriters, protecting human artists from the harmful effects of AI, and online safety for TikTok’s users. With respect to the issue of artist and songwriter compensation, TikTok proposed paying our artists and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay. Today, as an indication of how little TikTok compensates artists and songwriters, despite its massive and growing user base, rapidly rising advertising revenue, and increasing reliance on music-based content, TikTok accounts for only about 1% of our total revenue. Ultimately TikTok is trying to build a music-based business, without paying fair value for the music.”
To summarize what UMG is claiming, TikTok is allegedly not appropriately paying their artists what they earn from TikTok directly from streams and music royalties on their sounds. TikTok has been paying the artists a significantly reduced amount than what they should have been paying via a signed contract with UMG.
Song Artists benefit from music royalties, especially in a business form by another website or social media platform. TikTok pays artists royalties because the royalty is a payment form made to the asset (song) owner for the right to use that asset. In this case, we are talking about the payment form made to UMG. Royalties are generally discussed within a signed contract between both parties.
Will TikTok ever be the same? Or will this be the downfall of TikTok? After all, it heavily relies on popular music to stream its short-form videos.
UMG said unless TikTok will pay their artists the appropriate amount of money as well as handle the safety concerns between AI they will not continue and renew the licensing contract with ByteDance; the owner of TikTok.