By Gary Symons
TLL Editor in Chief
Universal Music Group has just signed a new, multi-dimensional licensing agreement that will see its artists return to the TikTok platform.
UMG says the new deal will deliver “significant industry-leading benefits for UMG’s global family of artists, songwriters and labels and will return their music to TikTok’s billion-plus global community.”
The deal appears to be a major win for Universal, which took a big risk by pulling out of its earlier music sharing agreement with the short video platform. Music is at the very heart of TikTok’s business, and the platform has become a critical aspect of promoting songs and artists.
UMG’s original, trendsetting agreement expired Jan. 31 after the two companies failed to reach agreement on key issues like artist compensation and TikTok’s use of AI to generate music.
UMG then issued a blistering open letter that was practically a declaration of war, titled “Why we must call Time Out on TikTok.”
“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,” the letter stated. “How did it try to intimidate us? By selectively removing the music of certain of our developing artists, while keeping on the platform our audience-driving global stars.
“TikTok’s tactics are obvious,” UMG added. “Use its platform power to hurt vulnerable artists and try to intimidate us into conceding to a bad deal that undervalues music and shortchanges artists and songwriters as well as their fans.
“We will never do that.”
This week the war has come to an end, and the latest statement from Universal is pretty much all sunshine and roses. A statement of the company praised both the new agreement and the value of TikTok in driving engagement for musical artists.
“The joint agreement marks a new era of strategic collaboration between the two organizations, built on a shared commitment to help UMG’s artists and songwriters achieve their creative and commercial potential,” Universal stated. “By harnessing TikTok’s best-in-class technology, marketing and promotional capabilities, UMG and TikTok will deliver improved remuneration for UMG’s songwriters and artists, new promotional and engagement opportunities for their recordings and songs and industry-leading protections with respect to generative AI.”
Universal Music did take some flack, including from some artists who were obviously very concerned their music would no longer enjoy exposure on TikTok. But Sir Lucian Grainge, Chairman and CEO, Universal Music Group said the time-out on TikTok has resulted in a win-win deal for both parties, and one that will be of long-term benefit to all the artists under UMG’s umbrella.
“This new chapter in our relationship with TikTok focuses on the value of music, the primacy of human artistry and the welfare of the creative community,” Grainge said. “We look forward to collaborating with the team at TikTok to further the interests of our artists and songwriters and drive innovation in fan engagement while advancing social music monetization.”
The deal is also a benefit for TikTok. While TikTok still held deals with other publishers, Universal is among the ‘Big Three’ in the global music industry, and losing their massive stable of hit-producing artists would be a big hit for the platform over the long term. As well, there was always the danger that other publishers could follow suit, which would ruin TikTok users’ ability to combine their videos with hit songs.
Music is an integral part of the TikTok ecosystem and we are pleased to have found a path forward with Universal Music Group,” said TikTok CEO Shou Chew. “We are committed to working together to drive value, discovery and promotion for all of UMG’s amazing artists and songwriters, and deepen their ability to grow, connect and engage with the TikTok community.”
The deal takes effect immediately, so fans on TikTok can now look forward to the return of UMG’s recorded music and publishing catalogs this week.
The agreement itself establishes terms that will likely become standard for TikTok’s music partners.
For example, both companies have committed to working on new monetization opportunities using TikTok’s growing e-commerce capabilities. That alone is a big deal, as artists may not make that much per song on the platform, but could earn significant revenue from branded merchandise.
TikTok and UMG will work together on campaigns supporting UMG’s artists across genres and territories globally, and TikTok will continue to invest significant resources into building artist-centric tools that will help UMG artists boost their revenue-generating potential on the platform.
Tools including “Add to Music App”, enhanced data and analytics, and integrated ticketing capabilities will benefit artists, both financially and in building their global fanbases using TikTok’s scale and engaged community, while strengthening online safety protections for artists and their fans.
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One of the big sticking points was over TikTok’s use of AI to generate songs that Universal felt was violating their artists’ copyright. The new agreement states that TikTok and UMG will work together to ensure AI development will protect human artistry and the revenues that flow to those artists and songwriters.
TikTok has also committed to removing unauthorized AI-generated music from the platform, as well as tools to improve artist and songwriter attribution, said Ole Obermann, TikTok’s Global Head of Music Business Development.
“We are delighted to welcome UMG and UMPG back to TikTok. We look forward to working together to forge a path that creates deeper connections between artists, creators, and fans,” Oberman said. “In particular, we will work together to make sure that AI tools are developed responsibly to enable a new era of musical creativity and fan engagement while protecting human creativity.”
Michael Nash is the man who would implement that part of the agreement on behalf of UMG as the company’s Chief Digital Officer, and the EVP of UMG.
He says UMG is in favor of working on innovations like AI as long as the rights of human creators is protected, and ideally, even enhanced, by the use of these new technologies.
“Developing transformational partnerships with important innovators is critical to UMG’s commitment to promoting an environment in which artists and songwriters prosper,” he argues. “We’re gratified to renew our relationship with TikTok predicated on significant advancements in commercial and marketing opportunities, as well as protections provided to our industry-leading roster on their platform.
“With the constantly evolving ways that social interaction, fan engagement, music discovery and artistic ingenuity converge on TikTok, we see great potential in our collaboration going forward.”
UMG and TikTok say they are working together to return music to the platform as quickly as possible.
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