The music industry's Cold War with TikTok just got very hot — and extremely complicated. By the end of the month, Universal Music Group (UMG) will require the platform to remove music it controls even a small part, using what some music executives are calling “the nuclear option.” This will prevent some other rights holders from making money on TikTok — but at least some of them are cheering it.
On January 30, the day before UMG's latest deal with TikTok expired, the company announced in an open letter that “we need to take time off TikTok” and began removing its recorded music from the platform. After a 30-day grace period, UMG says it will also require TikTok to remove any song in which Universal Music Publishing Group (UMPG) controls any rights. That means songs by Harry Styles, SZA and Bad Bunny. Those with writing credits from creators like Metro Boomin and Jack Antonoff. even those that sample compositions by UMPG songwriters. In some markets, this can account for more than half of the music used on the platform.
The question is what this means for the rest of the business. Styles, SZA and Bad Bunny are three of the biggest acts signed or distributed by Sony Music Entertainment, so this will affect that label as well as Warner Music Group, BMG and many independent labels. From late February until UMG and TikTok reach a new licensing deal, they won't make money from music that UMG owns rights to — a relatively small revenue stream at this point — while losing an important source of promotion. In the long run, of course, a win for UMG that pushes TikTok to pay more for music rights could also help the industry as a whole.
This Cold War turned hot quite suddenly. For years, rights holders have embraced TikTok as a promotional vehicle while grappling with the short-form video platform's low payouts in what seemed like a repeat of the music industry's contentious relationship with YouTube. Both can pay less than other platforms because in many cases they can effectively operate under the Digital Age Copyright Act, which allows them to own user-uploaded content until rights holders request takedown . In language that sounds like it could have come from YouTube a decade ago — or a file-sharing service a decade before that, in a statement posted on social media, TikTok said UMG had abandoned a popular platform “that serves as a free means of promotion and discovery for their talent.” Basically, they offer exposure. But as the creators and rights holders might say — and here you have to imagine a borscht-belt tradition — you could DIE from exposure!
UMG's move came at the worst possible time for TikTok: the day before a Senate committee hearing on child safety and social media amid an escalating conflict in the Middle East that has focused negative attention on China's owned by TikTok and during a week when much of the music business was in Los Angeles for the Grammys. That's not entirely a coincidence: UMG's long-term deal actually ran out at the end of 2023, and January 31st was just the end of a one-month extension. (A source close to TikTok said the two sides were close to a deal in late December, while a source close to UMG said it wasn't.) Fair or not, the pressure on Washington could be significant. (I have serious concerns about a Chinese-owned app becoming a major news source in Taiwan, but I'm not sure that has much to do with music licensing.)
So far, there has been some support for UMG from other companies in the music industry. The two other majors declined to comment – and are unlikely to, on antitrust grounds. However, Primary Wave, Downtown and Hipgnosis have voiced their support for Universal. And at a Grammy Week music publishers event, president/CEO of the National Music Publishers Association (NMPA) David the Israelite pointed out that the model contract with TikTok used by many NMPA members expires in April.
Tik Tokactually.
The dynamics here are complex but potentially revolutionary. Over the past two decades, most of the negotiations between media and technology companies have involved a few rights holders who each control significant amounts of content and a platform that has a larger market share than them — think labels and streaming services, or book publishers and Amazon. Since antitrust law almost always prevents big companies from trading together — a lesson Apple and some book publishers learned the hard way — the platforms have an advantage. In this case, UMG was able to gain more leverage by using publishing rights that by their nature will affect many compositions, creating a situation where some small companies can cheer this.
The question is what will happen after February. Rights holders can live off the money they make on TikTok, but what about the platform's promotional value for breakout artists? For now, artists on other labels who don't work with UMPG songwriters will likely gain an advantage. If this dispute lasts a few months, it might give the smaller labels enough of an edge to matter. But if it lasts longer than that, TikTok could also face more competition. The company has suggested that music represents a modest amount of the platform's value, but that will be tested if TikTok has to compete with other short-form video platforms that have rights to use music that it doesn't.
The most likely scenario is that UMGand TikTok will reach a deal—perhaps a deal they'll both grumble about but accept—and then over time find ways to work together that benefit both sides, as well as creators of all kinds. Short-form video could eventually grow into a really important revenue stream. By that time, of course, a new platform will probably emerge to challenge it as well.
