TikTok is one of the most popular and influential social media platforms in the world, with over 2 billion downloads and 1 billion monthly active users. The app allows users to create and share short videos, often featuring music, dance, comedy, challenges, and trends. However, the app also faced a major challenge in February 2024, when its licensing agreement with Universal Music Group (UMG), the world’s largest music company, expired and resulted in the removal of UMG’s entire catalog of over 4 million songs from the app. The conflict was resolved a week later, when the two parties announced a new and expanded global deal that promised to deliver equitable compensation for artists and songwriters, and to promote the development of new innovative experiences and features for music fans on TikTok.
The Causes and the Consequences of the Conflict
There were many reasons why the conflict between TikTok and UMG happened, such as financial disputes, legal issues, and strategic differences. Some of the main causes were:
Financial disputes
UMG accused TikTok of trying to build a music-based business without paying fair value for the music, and of bullying and intimidating its artists and songwriters. UMG claimed that TikTok accounted for only about 1% of its total revenue, which was evidence of how little TikTok compensated artists and songwriters, despite its massive and growing user base, rapidly rising advertising revenue, and increasing reliance on music-based content¹².
Legal issues
UMG alleged that TikTok violated its rights and obligations under the previous licensing agreement, which expired on January 31, 2024. UMG said that TikTok failed to obtain proper licenses for some of its features and functions, such as the use of artificial intelligence (AI) to create personalized playlists and recommendations, and the use of music in advertisements and sponsored content¹².
Strategic difference
UMG and TikTok had different visions and goals for their partnership and the future of the music industry. UMG wanted to protect and enhance its artists’ and songwriters’ interests and careers, and to ensure that they received fair and transparent compensation and recognition for their work. TikTok wanted to leverage its platform and its community to create and discover new music experiences and trends, and to foster deeper connections between fans and the artists and music they love.
The conflict between TikTok and UMG had various consequences and implications, both negative and positive, for the parties involved and the app itself. Some of the possible consequences were:
Negative consequences
The conflict resulted in the loss of access and choice for TikTok users, who could no longer use or enjoy UMG’s music on the app. This affected the quality and diversity of the content and the creativity and expression of the users. The conflict also damaged the reputation and credibility of both parties, who faced backlash, criticism, and boycott from fans, media, and industry peers. The conflict also created uncertainty and instability for the music market and the online music culture, which depended on the collaboration and innovation of both parties.
Positive consequences
The conflict also generated awareness and attention for both parties, who gained more exposure and publicity for their positions and perspectives. The conflict also stimulated dialogue and negotiation between both parties, who eventually reached a new and improved agreement that addressed their concerns and expectations. The conflict also inspired change and progress for the music industry and the online music culture, which benefited from the new opportunities and challenges that the conflict presented.
The Terms and the Benefits of the Deal
The deal between TikTok and UMG was announced on February 8, 2024, a week after the conflict erupted. The deal was described as an expanded global alliance that delivered equitable compensation for recording artists and songwriters, and significantly expanded and enhanced the existing relationship, promoting the development of new innovative experiences and features for music fans on TikTok³. Some of the main terms and benefits of the deal were:
Equitable compensation
The deal ensured that UMG’s artists and songwriters received fair and transparent compensation and recognition for their work on TikTok, based on the value and the usage of their music on the app. The deal also provided UMG with access to TikTok’s data and analytics, which helped UMG to monitor and optimize its artists’ and songwriters’ performance and potential on the app.
Expanded catalog
The deal restored and increased the access and choice for TikTok users, who could now use and enjoy UMG’s full catalog of music, spanning the company’s iconic labels, songwriters, and global territories. The deal also allowed TikTok users to discover and explore new and emerging artists and genres from UMG’s diverse and dynamic roster.
Enhanced relationship
The deal strengthened and deepened the collaboration and innovation between TikTok and UMG, who pledged to work more closely than ever to create and launch new music experiences and features that were uniquely centered on expression and enhancing connections between UMG’s artists and the music community on TikTok. The deal also enabled both parties to share their expertise and resources, and to support each other’s growth and development.
TikTok and UMG’s conflict and deal was a phenomenon that reflected the challenges and the opportunities of the online music culture, where technology, creativity, and business are intertwined. TikTok and UMG’s conflict and deal also revealed the tensions and the trends of the online music culture, where music is both a commodity and a community, and where music is both a source of conflict and a catalyst for compromise. TikTok and UMG’s conflict and deal was not likely to be the last of its kind, as the online music culture continues to evolve and expand. However, TikTok and UMG’s conflict and deal also showed that the online music culture can also be a platform and a partner for resolving and advancing the music industry and the music community..
Comments