Artists Resort to Alternative Sped-Up Versions as Universal Music Pulls Catalogue Off TikTok

Universal Music Group (UMG) has decided to remove its catalogue from TikTok due to disagreements on licensing terms between the two parties. This decision follows the expiration of their previous licensing agreement on January 31.

UMG's catalogue, which contains about 3 million tracks and around 4 million songs represented for publishing, will no longer be legally cleared for use on TikTok. The disagreement stemmed from three issues that UMG highlighted in its statement.

1. Appropriate compensation for UMG-signed artists and songwriters.

2. Protecting human artists from the harmful effects of AI.

3. Online safety for Tiktok users.

In response to UMG's decision, TikTok issued an official statement which reads:

In 2022, TikTok claimed it is responsible for the success of 13 out of the 14 tracks that reached No.1 on the Billboard Hot 100 that year.

In response to these, UMG said:

How Digital Platforms and Music Industry Work

You’re probably wondering what this is about, and I’m happy to explain briefly how major digital platforms and the music industry work together.

Social media giants like Meta/Facebook, Google, Tiktok and music streaming giants like Spotify, Apple, Amazon typically pay major labels (Universal, Sony, Warner) and indie giants (Merlin, Believe) an agreed-upon amount of money during a licensed period for permission to use their songs on their respective platforms.

Imagine Instagram, Snapchat, TikTok without music 🤔

So, after each licensing period ends, both the digital giant and record label either renew the same terms or negotiate new terms to continue using music on their platforms. However, when mutual agreements cannot be reached, as with UMG and TikTok, it can result in the removal of songs by artists signed to or affiliated with UMG. Consequently, users of the digital platform won’t be able to legally use music from UMG-signed artists such as Olivia Rodrigo, Taylor Swift, Drake, and others in their content.

However, the deal structure between social platforms like TikTok, Facebook, Snapchat, and record labels would differ from that of music streaming platforms like Spotify, Apple Music, etc. Two different business models

How Much Does TikTok Pay UMG Yearly?

According to UMG, TikTok proposed to pay their artists and songwriters at a rate “significantly lower than what similar major social platforms pay”. UMG further asserts that TikTok is “permitting the platform to be flooded with AI-generated recordings while actively developing tools to facilitate, promote, and incentivize AI music creation directly on the platform”.

Also that, TikTok is “sponsoring the replacement of human artists by AI by seeking contractual rights that would allow these AI-generated content to diminish the royalty pool for human artists”.

UMG further contends that despite TikTok's expanding user base, increased advertising revenue, and growing reliance on music-based content, TikTok's contribution to its [UMG] total revenue is around 1%.

UMG accuses TikTok of attempting to establish a music-centric business model without fairly compensating artists and labels, but instead “resorts to bullying UMG into accepting a deal valued lower than the previous agreement, far less than fair market value, and not reflective of TikTok’s massive growth”.

Quite a number of things to unpack from the above cut, so let’s zoom in…😅

If UMG claims that TikTok accounts for only about 1% of its total revenue, it makes me wonder how much TikTok is actually paying UMG.

If you factor what TikTok would potentially pay other major labels like Sony, Warner and indie powerhouses like Merlin, Believe; we can assume TikTok remits a total of $400-$500 million to the music industry. This estimate is based on the fact that UMG is the world’s biggest rightsholder with 32% global market share in recorded music and 23% global market share in publishing. Meaning it, most likely, commands a larger share of what TikTok remits to the music industry.

Is this clear?

How Much Do Other Platforms Pay UMG?

Now, going by UMG’s claim that TikTok pays them “only a fraction of what similar major social platforms pay”, it could be assumed that platforms like Meta/Facebook, with whom UMG signed a multi-year deal in 2022, should be paying two to three times the amount that TikTok paid. So, one can assume Meta/Facebook is paying UMG about $200 million to $300 million per year to license content.

Ripple Effect of UMG and TikTok’s Licensing Disagreements

As we speak, UMG's recordings are completely unlicensed on TikTok, while UMG's publishing catalogue is undergoing a 30-day cooling-off period and is expected to be removed by the end of February. TikTok videos featuring tracks by UMG artists such as Olivia Rodrigo, Taylor Swift, Ariana Grande, and even Odumodublcvk (affiliated with Def Jam, a subsidiary of UMG through Native Records) have been muted.

This makes me wonder how bad things can get, considering TikTok claims that it has reached “‘artist-first’ agreements with every other major label and publisher”, without thorough consideration of the ripple effects. I’ll explain

For recorded music, this can be straightforward but in the case of Publishing, it just might be more complicated than ever. This is because UMG [partially] represents about 4 million songs as Publisher. In many cases, UMG handles publishing for artists signed to other record labels.

An obvious example is Burna Boy, who is signed to Warner/Atlantic for records but signed to Universal Music Publishing Group (UMPG) for Publishing. There’s also Adele, signed to Sony/Columbia for recordings while UMPG handles her Publishing.

There are also cases of songwriters signed to UMPG who contribute to songs by artists signed to other labels. For instance, Tobias Jesso Jr. is signed to UMPG as a songwriter and has co-written credits in songs of Omar Apollo (signed to Warner) and Harry Styles (signed to Sony). If UMPG’s catalogue is no longer licensed for TikTok, tracks by Omar Apollo and Harry Styles, featuring a UMPG writer like Tobias Jesso Jr., may also become unavailable on the platform.

Imagine tracks with multiple writers, samples, and other elements controlled by UMPG. If a UMPG writer has, say 1% of songwriter credits to a recording, that song might be yanked off TikTok as well.

It would be crazy if every track in which UMPG owns or represents a portion of the songwriting credits are pulled off TikTok. The industry-wide effect would be even more severe than imagined, especially considering rumors that up to 80% of all relevant music content on streaming and social platforms includes some form of UMPG songwriting representation, which is due to UMG's representation spanning anywhere from 1% to 100% of each song.

How Artists Are Keeping Things Moving

UMG signed or affiliated artists have been caught in this crossfire and would have to explore alternative ways to keep promoting their music on TikTok. Ayra Starr, signed to Mavin Records, appears to have licensed "Commas" through Republic Records, a subsidiary of Universal Music Group.

The single, released on February 1, would coincide the effective date of UMG releases being pulled off TikTok. The UMG affiliation is evident in how the singer has latched into alternative/sped-up versions of the song to keep promotions alive on TikTok, as the official masters of “Commas” remain unavailable on the platform.

“Commas” has recently hit Number 1 in Nigeria and Top 10 in Kenya, Tanzania, Uganda, The Gambia, Sierra Leone etc.

First Time? Certainly Not!

This wouldn't be the first instance of such happening in the music industry between a record company and a digital service. In 2008, Warner pulled its videos from YouTube in protest against the licensing revenue it was receiving from the platform.

However, Warner chose to remove only official videos from its recording artists on YouTube, without interfering with videos or content featuring Warner Chappell songwriters (Warner's publishing arm). Warner would return to YouTube a year later, while revealing it spent $2 million on largely unsuccessful attempts to block/remove copyright infringements of its recorded music by YouTube users during the interim period.

In 2022, Kobalt similarly withdrew its publishing catalog from Facebook due to a dispute over licensing terms. Kobalt, a smaller-scale publisher compared to UMPG, represents about 700,000 songs. This takedown impacted recordings of artists who’re signed to labels outside Kobalt. However, both Kobalt and Facebook managed to resolve their issue within two months.

On a lighter one, TikTok and Warner reached a mutual agreement for a multi-year licensing deal in July 2023. Both TikTok and Warner confirmed that their "multi-year, multi-product" deal would involve Warner licensing the catalogue of Warner Recorded Music and Warner Chappell Music to TikTok and TikTok Music, as well as ByteDance-owned video editing platform CapCut, along with TikTok's Commercial Music Library.

And as Warner’s CEO, Robert Kyncl opined, I’m very confident that TikTok and UMG will – at some point – find an agreement and hopefully, its soon enough.