Early Thursday morning, at 2:35 a.m. ET to be exact, Universal Music Group and TikTok announced a settlement of their three-month dispute over royalties, AI policies, and other issues. This battle has been a huge disruption for the industry, but most of all for artists, who suddenly find their music muted on the world's most powerful platform for discovering and promoting music. There were thousands of artists.
Although the terms of the deal remain unclear, UMG Chairman and CEO Lucien Grainge detailed the deal in a letter to staff obtained by Variety. In it, he says (in the case of AI) to “protect human artists from being economically disadvantaged by AI; prevent the use of AI-generated deepfakes; and ensure that AI companies train their models.” We want transparency in how we do things.”
He also said, “Artist and songwriter compensation will be greater than previous TikTok deals, and the total amount UMG artists and songwriters will earn from this partnership will be more closely aligned with other platforms in the social music category.” '', but did not provide details. . Mr. Grainge is expected to say more along these lines at the company's quarterly earnings call this afternoon.
The full text of his letter is below.
Dear Colleagues:
We are very happy to share the good news that our dispute with TikTok has ended with a clearly positive outcome. TikTok has agreed to important changes in several key areas (artificial intelligence, platform safety, compensation, etc.) and we plan to license TikTok again. Music for them.
This agreement is designed to help guide the industry's evolution toward a future where human artistry is respected, artists and songwriters are treated fairly, and fans are provided with a platform that prioritizes safety and integrity. This represents another important step that we have taken.
We would like to express how grateful we are for the support we have received from so many corners of the global music community over the past few months. Artist rights organizations, independent labels, music publishers, music advocacy groups, and of course so many individual artists and songwriters have recognized the importance of what we are trying to achieve and have openly expressed their support. He did. They came together in purpose and strengthened our resolve to fight for the results we achieved – a deal that benefits not only UMG artists and songwriters, but the entire music ecosystem.
As an organization committed to breaking new ground, advancing the industry, and protecting artists and songwriters from the negative effects of disruptive technology, we anticipate the inevitable conflicts that will arise from delivering on that promise, and we also accepts it. But ultimately, the point of engaging in conflicts like this is to find higher common ground to bring about progress. I'm extremely proud of what our team and artists were able to accomplish through TikTok, finding common ground to build the foundation for a brighter future.
Three months ago, on January 30th, we published an open letter to the artist and songwriter community stating that any new agreement with TikTok must address three key issues: did.
Protect artists and songwriters from the harmful effects of AI and the dilution of royalties from a flood of AI content.
Improve the compensation paid to artists and songwriters.and
We prioritize online safety for both TikTok users and artists.
To convey the essence of what we have accomplished, we will highlight the accomplishments we have made on all three issues in the context of why these issues are so important to UMG and to all of us as a community. .
I. Protecting human artists from the negative effects of AI
TikTok has now addressed the key concern we expressed in our open letter that AI-generated content “significantly dilutes the royalty pool for human artists.” Additionally, they make a number of promises regarding AI that show respect for the work of artists and songwriters and their “right of publicity,” as well as support for his UMG principles regarding AI, including non-consensual training. .
When used responsibly, AI technology offers huge untapped potential for artists, but when used irresponsibly, it can cause serious harm to artists. UMG has led the industry in harnessing the opportunities of AI while addressing its potentially harmful impacts. Our Responsible AI initiative, launched last year, puts protecting artists and advancing their interests at the heart of how we think about AI. The goals of this initiative are:
Protecting human artists from economic disadvantage caused by AI.
Prevent the use of AI-generated deepfakes.and
Demand transparency in how AI companies train their models.
New agreement with TikTok protects the integrity and value of human artistry and ensures the removal of “fake artist” AI content uploaded by third parties that misuse artists' identities and violate publicity rights. This is what you do. This new agreement further extends protections for artists and fosters a better environment for authentic artist and fan engagement.
This transaction is just the latest example of how we are advancing our AI initiatives. Over the last year, with artists at the forefront of our strategy as always, we have developed relationships with a wide range of leading technology companies and entrepreneurs, and are collaborating with a growing number of companies on a variety of market-driven opportunities and approaches. Ta. Responsible use of AI.
II. Improved compensation for artists and songwriters
Under the new deal, artist and songwriter compensation will be higher than under the previous TikTok deal, and the total amount UMG artists and songwriters will earn from this partnership will be more closely aligned with other platforms in the social music category. become. Additionally, TikTok has implemented tools and processes to address issues of provenance and attribution, helping artists and songwriters monetize their work more effectively.
As technology evolves and allows fans to enjoy and consume music in new ways and from new sources, artists and songwriters benefit from the revenue generated from those new sources for the health and vitality of the music industry. You need to be compensated fairly. Social media is an important category to achieve this goal.
In 2017, as the growth of social media transformed culture, UMG and Facebook signed a first-ever deal to monetize what hadn't already been monetized: the use of music on social platforms . Since his initial deal with Facebook, the continued growth of social media and its involvement in free consumer music has been remarkable.
In fact, this revenue stream from social music initiatives generates tens of billions of dollars in advertising revenue for digital platforms. (And that consumer engagement greatly benefits the platforms in other ways as well, allowing them to acquire customers for other businesses, such as e-commerce.) Given the huge amount of money they generate, whatever their claims of “free promotion” may be, they can still provide enough money and fair compensation for the use of their music. It's unreasonable.
Revenue sources from several categories that are now “free to consumers” (ad-supported streaming, synchronization, neighboring rights, etc.) account for more than 30% of the global recorded music industry's total revenue, and It has almost doubled. Ten years ago. For some artists, this amounts to between 20% and 40% of their income from recordings.
Keeping in mind the commercial importance of this sector, over the past few months we have accelerated our engagement with music on other monetized social platforms such as Snapchat, Instagram and YouTube Shorts. And our recent deal with Spotify gives us access to a range of new features previously available only on social media platforms, further expanding the very definition of the social music category. In short, revenue from social media is an increasingly important source of income for artists, songwriters, labels, and publishers, which is why we have and continue to focus on protecting and advancing social media. I will put more effort into it.
III. Providing online safety for TikTok users and artists
Under our new agreement, TikTok has agreed to take steps to address our concerns about the integrity of the platform and the negative impact of social media on our users.
The harmful consequences of unmonitored social media have been making headlines recently. Working to promote the safety and integrity of the environment for artists and their fans is an important part of our mission.
Our agenda concerns regarding TikTok include safeguards such as policies and tools to prevent and remediate hate speech and bullying. Some of our platform integrity measures include important steps to help address deepfakes, infringing content, unauthorized content, and algorithmic manipulation.
Finally, I'd like to say a little more about the unprecedented support we've received from the music community, especially the individual artists and songwriters who have spoken out in various forums. Of particular note are those who signed the recent Artist Rights Alliance open letter calling on tech platforms to embrace AI responsibly, rather than at the expense of recording artists and songwriters. Their widespread support underscored the importance of strengthening AI protections. In particular, we would like to express our deepest gratitude to all of the UMG artists and songwriters who have had to endure the removal of their music from TikTok during the conflict over the past few months. We understand how difficult this has been for some of them and we are so grateful for their willingness to pursue the path we have chosen. I have no doubt that their advocacy will positively impact the future of the industry for all artists, both publicly and behind the scenes.
Thank you to everyone who helped make this possible. This is another example of what the music community can achieve when we work together.
lucian