The Unveiling of Universal’s Decision:
In their open letter, UMG made it clear that TikTok falls short in compensating for music licensing compared to other major social platforms. Despite UMG’s artists having substantial visibility on TikTok in 2023, the platform contributes only 1% to the label’s revenue. UMG also highlighted that TikTok lacks an effective process for removing copyright-infringing content, highlighting the manipulation of artists’ recordings by AI, and diluting royalties for artists. The looming question is whether other labels will adopt a similar stance.
TikTok fired back, labelling UMG’s decision as “sad and disappointing,” accusing the label of prioritising its interests over those of its artists and songwriters. The platform emphasised its role as a powerful promotional and discovery tool for talent, boasting well over a billion users.
The Challenge of Fair Remuneration
UMG’s actions echo a resounding message—fair compensation is non-negotiable for the future of the music industry. This move throws a spotlight on the ongoing negotiations between music streaming platforms, social media platforms, and record labels, prompting a reassessment of intricate algorithms and royalty structures.
The Universal-TikTok rift underscores the industry’s need for this increased transparency. Such practices have the potential to revolutionise revenue distribution, providing artists and songwriters with the tools to cultivate a clear, fair and more sustainable music ecosystem. At first glance, it might seem like it’s all contracts and royalties, but really, it’s about recognising the value of artistic work in the digital age.
This also emphasises the growing importance of securing the right deals and upholding the fundamental principle of obtaining fair agreements for artists, songwriters, and right-holders. Ultimately, this pivotal moment beckons the broader music industry to redefine its practices, ensuring that the artistry propelling its success receives due acknowledgement and royalties.