At the end of January, Universal Music Group (UMG) failed to negotiate a new licensing deal with TikTok and removed its entire music catalog from the app. Just like that, thousands of videos featuring music from artists like Drake, Taylor Swift, and Bad Bunny suddenly went silent.
UMG said it made this decision because TikTok offered to pay only a fraction of the fees offered by other social platforms. TikTok said Universal is “prioritizing its own desires over the interests of artists and songwriters.”
Some artists and songwriters have spoken out about the situation. “I think this is a huge afterthought. At least we should have known,” Jack Antonoff told reporters in the press room after winning Best Producer at the Grammys earlier this month. “The whole industry has become like, “I have to do everything.'' I was thinking, “I have to do everything, and I have to do it here,'' and then one day I thought, “Oh no!'' ”
Musicians aren't the only ones upset by the chaos. Content creators like Jared Germain, who analyzes music samples on TikTok, posted videos of themselves in tears, claiming that videos they created containing UMG music were removed. And dancer and content creator Lars Gummer told The Daily Beast that he went from “shocked” to “disappointed.”
“Most of my friends in LA are content creators, especially dance creators,” he said. “So right away, we were all outraged by the decision that was made between UMG and TikTok.”
On a recent episode of Today, Explained, digital activist and author Cory Doctorow told host Sean Rameswaram that companies like TikTok “don't need to worry” about the disruption they cause to users. Ta. Doctorow coined the term “encittification.” We use this to describe the process digital platforms use to lure customers and offer them products and experiences they can't find anywhere else, but ultimately only make things worse for the customer. . Provide better service to business partners.
“I think the calculation that TikTok is making is that they want to cause more pain to their customers than to their shareholders,” Doctorow said. “No matter what Universal wanted, [TikTok’s] Customers are left with the pain of having the videos they spent hours, days, or even weeks creating and perhaps thousands of dollars suddenly go silent because TikTok has decided not to act in their best interest. You'll have to live. ”
To better understand the battle between TikTok and Universal Music Group, Rameswaram spoke to Nilay Patel, editor-in-chief of The Verge. An adapted transcript of their conversation, edited for length and clarity, follows below. — Hadi Mawaide
Sean Rameswaram
Nirei, you do TikTok, right?
Niraj Patel
I'm doing TikTok.As a viewer I have a burner [account] What no one knows. But I always use The Verge channel on TikTok.
Sean Rameswaram
As someone who may have multiple TikTok accounts, can you tell me how important music is to the platform?
Niraj Patel
TikTok is built on music. It came to this country as part of an acquisition. So ByteDance, which owns TikTok, acquired a platform called Musical.ly. [mostly filled with] Teens dancing to music. And TikTok has built itself on the foundation of people consuming music, creating music for the platform, creating dance trends, recontextualizing music, and reviving old music. Everything on TikTok is built around music. Music almost serves as an organizing principle for TikTok.
Sean Rameswaram
But a few days ago, things got a little quiet on TikTok. what happened?
Niraj Patel
So Universal Music Group, the world's largest record label, pulled music from TikTok. UMG represents everything from Taylor Swift to Drake to Bad Bunny. And UMG says TikTok is trying to bully us. They want to pay less than the market price to license their catalog. We are not willing to accept low rates. Until TikTok can pay us like the big social networks, our music will disappear.
Sean Rameswaram
And the musicians you mentioned — Bad Bunny, Drake, Taylor Swift. They are three of the greatest musicians in the world. Will they be okay with this? Are they okay with all their music being ripped off from TikTok?
Niraj Patel
I think big artists are perfectly fine with this. They all want more money. They know they are the lifeblood of the platform. They know their fans will want them regardless. Perhaps most worrying are the up-and-coming artists who were discovered and became popular on TikTok. And it's an interesting schism because this conflict hasn't come into the public consciousness yet. I haven't found any evidence yet that that schism is real, but as time goes on and this drags on, I think that's the schism we'll see.
Sean Rameswaram
Nirai, who will lose more in this conflict? Are you a musician? Is it a label? Or is it TikTok?
Niraj Patel
The clear winner at the moment is TikTok. The entire base of TikTok creators doesn't have access to what they care about most: music. If you look at the bottom of all his TikTok videos, you can see what kind of audio is used. Mostly songs. Click on them to see all other videos using that audio. That's how TikTok was organized, and it's gone. It's silence.
Some creators have complained that their entire archive of content is simply muted because the music is gone. And if we as a platform can't provide that value to creators, they may suddenly start thinking that they can provide audio to that audience on other platforms like Instagram Reels or YouTube Shorts and spend their time there.
That hasn't happened yet. Not enough time has passed yet. I think everyone assumes that this issue will be resolved, but one of the main things the platform provides to creators is licensing. Creators don't have to worry about that when creating content for big platforms. And now, that's the case with TikTok.
Sean Rameswaram
So how did TikTok make this happen?
Niraj Patel
TikTok has become a powerhouse for music discovery, not just for new artists, but across America, and perhaps the world. These vast catalogs of music, sold and resold for billions of dollars, are once again becoming more valuable thanks to TikTok.
Thanks to TikTok, old music is back in style and back on the charts. Stevie Nicks becoming a superstar again has never happened before in music history. Because a guy was skateboarding while listening to Fleetwood Mac. That's the power of TikTok in culture, and I think overall, that's a good thing.
TikTok creates new artists and new relationships with artists. This maintains the relationship between fans and older artists. Recontextualize old music. TikTok is sparking fresh and interesting conversations about music, its place, and its culture.
TikTok understands that's the value it offers to the music industry, and it also knows that the music industry doesn't have its own great answers on how to break new artists without a social platform. So I think this is saying to Universal Music Group, “We're giving you all this value.'' You can leave. You'll never be able to break out as an artist again. And they did a test in Australia where they didn't show the new artist to people just to see what happened. What were they trying to prove? Hey, there are no new artists breaking into the Australian market.
So TikTok is trying to demonstrate this leverage. And I think they're now trying to say, “Look, that's the value we provide, and it's not just dollars.” I think UMG is saying this. “Yes, but the entire platform is built on the music that artists make.” You have to pay us for that.
A meeting of minds will take place. There comes a halfway point. I don't think it will last forever.
Sean Rameswaram
So, Nilai, this controversy is all about money. How much did TikTok pay Universal Music Group for its music license? How much does UMG want now?
Niraj Patel
There are no difficult numbers. The numbers can be traced back to clues Universal gave in its letter announcing its departure from TikTok.
Universal said TikTok accounts for 1% of its revenue. Universal is a public company. According to trade publication Music Business Worldwide, they went back through the numbers and found that TikTok pays Universal about $110 million a year. It's not a huge amount. For a large platform like Meta, it ranges from $200 million to $300 million per year. This applies to Instagram and Facebook. Streaming services like Spotify and YouTube pay much more.
In other words, TikTok is just a drop in the bucket of Universal's revenue. It's not a lot of money, but if you're UMG and Taylor Swift's “Cruel Summer” hit No. 1 on Billboard's Top 100 again when it went on tour, it's because the kids on TikTok are playing If you say it's because you were dancing, and if you think about this song, it's worth a lot of money to TikTok. It's a cultural moment that TikTok should benefit from, and we're entitled to a big chunk of that money too.
Sean Rameswaram
Can you guess who will blink first here? TikTok or Universal?
Niraj Patel
My instinct is that TikTok will be the first to flash because I know Universal won't. Universal CEO Lucien Grainge is very focused on things like generative AI and platforms right now. They pushed YouTube into a deal that would allow Universal to remove AI-generated copies of artists like Drake from the platform, which is not actually provided for in copyright law. There is no legal precedent for doing such a thing. And I basically gave up on YouTube.
So I think Universal is in a high position with some kind of moral influence over artists and fans of artists. At the same time, TikTok is starting to squeeze users. It's no longer an up-and-coming service or a service that spends a lot of money to acquire users. So we're pushing sponsored content all over the place. In other words, the platform is undergoing a real transition from its dominance as a new, interesting, free, and organic social platform to one that is relentlessly monetized.
I think the appropriate response is for labels to say, “Okay, we're starting to monetize this platform.'' We made it possible for you to build cheaply, so you deserve that significant savings.
To listen to the rest of the conversation, click here and be sure to follow Today, Explained on Apple Podcasts, Google Podcasts, Spotify, Pandora, or wherever you listen to podcasts.
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