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Universal Music Group, TikTok and the changing tides of the music industry

Courtesy of Solen Feyissa

TikTok users transform songs into viral sensations through catchy lyrics, groovy dances, and comedic content.  This makes music and pop culture undeniably integral to TikTok. 85% of the platform’s videos contain music, and 75% of its users discover new artists through the video-sharing app. The social platform embraces its relationship with music, even declaring, "TikTok is the home for music trends that permeate the industry, charts, and culture."

Starting on February 1, Universal Music Publishing Group (UMG) — one of the three largest global music companies — pulled its substantial music catalog which comprised a third of TikTok's top songs of that week. Sounds from famous artists like Taylor Swift, Harry Styles, Bad Bunny, Post Malone, and BTS are no longer available on TikTok. 

In a detailed letter to the public, UMG condemned TikTok for its business practices. TikTok proposed compensation rates "at a fraction of the rate that similarly situated major social platforms pay." The platform also encouraged a surge of AI-generated music and then "[demanded] a contractual right which would allow this content to massively dilute the royalty pool for human artists, in a move that is nothing short of sponsoring artist replacement by AI." Additionally, removing "infringing or problematic content" was "monumentally cumbersome and inefficient." UMG then accused TikTok of intimidation "by selectively removing the music of certain of our developing artists, while keeping on the platform our audience-driving global stars."

TikTok responded, arguing UMG hid its "greed" behind "false narrative and rhetoric." If UMG truly considered "the best interests of artists, songwriters and fans," the publishing group would have assumed the platform's "free promotional and discovery vehicle for their talent." UMG believed TikTok's response expressed "woefully outdated views."

Many independent music labels support UMG's judgment. A2IM, representing over 600 independent recorded music companies, asserted that UMG has taken a stance to address "the delicate balance between leveraging digital platforms for marketing and promotional purposes and the crucial need for fair compensation," and TikTok has been squeezing revenue from the music industry.

A marketing manager reported to Billboard that an artist who administered a promotional campaign through TikTok received less than $5,000 for a single that accumulated billions of views and half a million videos. TikTok's payments are unlike other ad-supported social media platforms, such as YouTube, where an artist might earn between $500 to $2000 for 1 million views. Independent labels feel camaraderie with UMG for taking a stand for artists' pay.

On the contrary, many independent musicians on TikTok see UMG's departure as an opportunity for growth on the platform because there are fewer famous artists to compete with.

Lilith Max, an independent artist on TikTok, professed she "gained 10,000 followers and 563,000 views" after posting a video the day UMG's catalog was removed. 

Despite some of the perceived benefits of the conflict between UMG and TikTok, TikTok creators, UMG artists, and listeners feel the licensing dispute has left them worse off. Without music from some of the world's most famous artists, many TikTok creators who rely on their social media for financial support now possess silent, inutile videos. 

Unaware and blindsided by Universal's decision, a few UMG artists ponder what is left of their careers without the help of TikTok's algorithm. Conan Gray — the artist behind popular songs "Heather" and "Maniac" — told the Rolling Stone, "my career is over, for sure. I'm never gonna have a hit song again at this rate." 

Another large global music publisher — Warner Music Group (WMG) — has also experienced challenges with TikTok. WMG's CEO Robert Kyncl explained "our deal was very difficult too. But we got there, and for us it was fair." 

In 2023, WMG and TikTok established an expansive licensing agreement to capitalize on the interdependence between the music industry and the social medium. The two companies plan to "find new ways to harness TikTok's revenue generation and promotional capabilities, as well as a wealth of insights."

Recent developments suggest TikTok envisions a future where the network is more than just a social platform. WMG's CEO stated, "the deal features improved monetization per MAU (monthly active user) that is comparable to other ad-supported DSPs (digital service providers), fully recognizing the value of our music and how critical it is to engagement on the platform," implying that TikTok could be more lucrative than widespread services such as Spotify or Deezer.

It is uncertain what will happen after UMG and TikTok quarrel. Still, the changing dynamics between the music industry and social media platforms will force artists, creators, and users to adapt.


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