Universal Music Group (UMG.AS) and TikTok have struck a new licensing agreement, bringing back UMG’s artists and songs to the social media platform. This multi-faceted deal also includes measures to protect musicians from artificial intelligence impacts.
Renewed Collaboration: A Multi-Dimensional Deal
After the previous licensing deal expired in January, resulting in the removal of Universal’s content from TikTok, both companies have now reached an agreement on royalties, AI, and user safety. Describing the new pact as a multi-dimensional deal, UMG and TikTok are working “expeditiously” to restore music by UMG’s artists to the platform. They aim to explore new monetization opportunities through TikTok’s expanding e-commerce capabilities and to support UMG’s artists globally.
TikTok: A Key Platform for Music Discovery
TikTok has become a crucial marketing tool for the music industry, especially among younger audiences. According to Midia Research, TikTok is the primary platform for music discovery for 16- to 19-year-olds in the United States, surpassing YouTube and Spotify. “Roughly a quarter of U.S. consumers say they listen to songs they have heard on TikTok,” said Tatiana Cirisano, Midia’s senior music industry analyst.
Financial Disparities and AI Concerns
Despite its popularity, Universal Music has raised concerns about the compensation its artists receive from TikTok compared to other platforms. In 2023, TikTok accounted for only 1% of Universal’s annual revenue, about $110 million, while YouTube paid the music industry $1.8 billion from user-generated content in the 12 months ending June 2022.
AI remains a significant point of contention. Universal claims TikTok is “flooded” with AI-generated recordings, including songs created using TikTok’s AI songwriting tools. The new agreement is committed to protecting human artistry and ensuring fair compensation for artists and songwriters. “TikTok is also committed to working with UMG to remove unauthorized AI-generated music from the platform, as well as (developing) tools to improve artist and songwriter attribution,” the statement said.
The Bigger Picture: TikTok’s Future in the U.S.
The deal comes amid uncertainty over TikTok’s future in the United States. President Joe Biden recently signed legislation giving TikTok’s Chinese owner, ByteDance, 270 days to sell its U.S. assets, a move TikTok plans to challenge in court. More than 170 million Americans use TikTok, and globally, it boasts over 1.5 billion monthly active users, according to Statista.
A Step Forward for Music and Technology
The renewed licensing agreement between Universal Music Group and TikTok marks a significant step in addressing the challenges posed by AI in the music industry while leveraging the platform’s powerful reach for music discovery and promotion. As both companies navigate this evolving landscape, their collaboration will be crucial in shaping the future of music and technology.
