Proactive Investors - Universal Music Group (AS:UMG), the publisher of music from Taylor Swift, Ariana Grande, Adele and Sam Smith to the Beatles, Chemical Brothers, Drake and Kendrick Lamar, has demanded the industry "call time" on Tiktok, accusing the social media company of bullying and intimidation tactics as the pair try and negotiate a new deal.
An open letter addressed to the 'artist and songwriter community' was shared by the world's largest music publisher ahead of its contract with TikTok expiring on January 31, 2024.
During the contract talks, UMG, which is 20% owned by China's Tencent, said two of the main issues it has been pressing on TikTok, which is owned by China's ByteDance, were how much artists are paid and how musicians can be protected from the "harmful effects of AI".
TikTok has become a powerful force in the music industry, with bands or singers whose songs have been played on viral TikTok videos generally propelled to major success on streaming platforms and the top of the music charts, sometimes with the resuscitation of old songs breathing new life into 'forgotten' artists.
Chinese social media group has freely admitted that "music is at the heart of the TikTok experience" and UMG acknowledged that TikTok, which made revenues of over $110 billion in 2023, is "increasingly influential" in the sector.
But the Netherlands-based group argued that TikTok's success has been "built in large part on the music created by our artists and songwriters", with more content on TikTok containing music than any other major social platform.
Last year UMG had success in pushing a new 'artist-centric' initiative, where better payment terms and more restrictions on AI-generated music were agreed with most music streamers, including Spotify and Deezer, as well as social media platforms.
But it said in the letter that TikTok proposed paying "a rate that is a fraction of the rate that similarly situated major social platforms pay" and is therefore "trying to build a music-based business, without paying fair value for the music".
TikTok was also accused of allowing its platform to be "flooded with AI-generated recordings" and offering tools to enable and encourage AI music creation, which would "massively dilute" the royalty pool for human artists.
UMG said this was "nothing short of sponsoring artist replacement by AI", while also making "little effort" to deal with large amounts of musical content on the platform that infringes on its artists’ music.
UMG said when it proposed TikTok takes similar steps as other platforms to try to address these issues, "it responded first with indifference, and then with intimidation" through its attempts to "bully us into accepting a deal worth less than the previous deal, far less than fair market value and not reflective of their exponential growth".
It said the intimidation took the form of selectively removing music from certain newer artists.
The letter concluded with UMG saying it recognises the potential impact of not agreeing a new deal on its artists and their fans but said its main responsibility to its artists was "to fight for a new agreement under which they are appropriately compensated for their work, on a platform that respects human creativity, in an environment that is safe for all, and effectively moderated".
UMG's labels include Capitol, Decca, Def Jam, Deutsche Grammophon, Interscope, Island, Motown, Polydor, Republic and Virgin EMI.