A longstanding feud between TikTok and Universal Music Group seems to have finally reached an end, with both parties signing a deal that will see Universal-backed music returned to the social media platform.
Universal first removed its artists’ work from TikTok about three months ago, restricting access to tunes from household names such as Billie Eilish, Adele, Harry Styles, Drake, Kendrick Lamar, Kanye West and Post Malone.
Taylor Swift was initially included this group, but reinstated her offerings ahead of the release of The Tortured Poets Department. Unlike most artists signed with Universal, Swift struck a unique deal that lets her control where her music is played.
While the dust may have finally settled, the Universal music drought left millions of TikTok users with a less than optimal experience for months – and may have put up an unnecessary barrier for Universal’s smaller artists.
The events have also shone a light on just how codependent the music and social media industries are, and how important compromise will be moving forward.
The beef (and resolution) explained
The previous agreement that granted TikTok users access to Universal’s catalogue lasted until January 31, and was worth A$170 million per year for Universal (about 1% of its yearly revenue).
Talks to enter a new agreement reportedly turned hostile, leading to Universal pulling the plug.
In an open letter published on January 30 “to the artist and songwriter community”, Universal said it was concerned about “appropriate compensation” for artists and songwriters, and protecting artists from the harmful effects of AI, among other things.
Universal claimed:
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.
Universal knows its music is a key part of TikTok users’ experience. It likely wanted a deal that reflected its market dominance, such as one linked to instances of use and a cut of advertising revenue, rather than a lump sum payment.
TikTok offered its own framing on the matter:
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.
In a recent statement, the companies said the new deal would deliver improved pay terms for Universal’s artists – but stopped short of publicly providing any financial terms or dollar amounts. TikTok also said it would commit to removing unauthorised music generated by artificial intelligence, a growing concern for the music industry.
Music from Universal’s artists is expected to return to the platform in one to two weeks, with muted videos regaining their audio.
Universal’s upper hand
It’s not surprising Universal came out of negotiations with a better deal than it previously had. TikTok is famed for its dance and music-related content, and likely couldn’t afford to go on without access to Universal’s catalogue.
In early 2023, TikTok ran a “trial” restricting some users’ access to major-label music in Australia. The result was a drop in both users and activity.
Past court rulings also suggested the deck would be weighted in Universal’s favour. For instance, one ruling in Germany found that, under European Union regulations, TikTok was liable for unlicensed content appearing on its platform.
A continued boycott from Universal could have proven a nightmare for TikTok, since Universal is the biggest of the big three music publishers (alongside Warner and Sony). It also owns a glut of relatively smaller or “independent” labels, including Capitol, Def Jam, EMI, Island, Polydor and Virgin.
A co-dependant relationship
At the same time, it’s naive to suggest the only benefit Universal gets from TikTok using its music is through the revenue TikTok pays. This would ignore the vast influence TikTok also has on the music industry.
One TikTok trend from this year was inspired by a scene from the Oscar-nominated film Saltburn, where the protagonist dances to Sophie Ellis-Bextor’s 2001 hit Murder on the Dancefloor. Because of TikTok, a song only ever heard at your mate’s wedding temporarily became the epicentre of youth culture.
This is just one example of how TikTok can deliver wins for both parties. That’s not even considering how many Universal artists frequently use TikTok to engage with their fans.
Universal and TikTok win, so who lost?
Even if a deal had not been reached, it would be hard to see either Universal (which made A$17.5 billion in 2022) or TikTok (which made A$14.5 billion) as “victims” or “losers”.
It’s also fair to say Universal’s roughly three-month boycott didn’t hurt any of its headline artists. It was likely the smaller artists, who see close to nothing of the money TikTok pays Universal, would have suffered the most. Beyond that, it was TikTok users who paid the price.
One Rolling Stone article noted the case of Cody Fry, whose track Things You Said was going viral on Douyin (mainland China’s wing of TikTok). But just as he was planning to capitalise on the exposure, his music was pulled.
The same events, in different context, produce different narratives. Legacy artists such as Taylor Swift are “exploited” by TikTok, while emerging artists are “promoted”.
Both corporations have their own case (and money) to make in such squabbles, while the small fry get left behind. Yet the fact that Billboard now publishes a TikTok top 50 chart stands as evidence these two industries need each other.
If they care about listeners and budding talent, they ought to both bend a little to avoid another drought.