Universal Music Group and TikTok bury the hatchet with new licensing deal

Described as a ‘new era of strategic collaboration between the two organizations’, the deal will see the return of Universal’s recorded music and publishing catalogues to the social media platform, and will ‘deliver significant industry-leading benefits for UMG’s global family of artists, songwriters and labels.’

According to Music Business Worldwide, Universal’s catalogue of around 4 million songs and 3 million recordings will be available on TikTok within one or two weeks, meaning all videos that had previously been muted will be unmuted.

Improved remuneration for Universal’s songwriters and artists is promised as part of the new agreement, referencing TikTok’s ‘growing e-commerce capabilities’, as well as new promotional and engagement opportunities, and ‘industry-leading protections’ with respect to generative AI.

TikTok says it will continue putting ‘significant resources’ into building artist-centric tools such as “Add to Music App”, enhanced data and analytics, and integrated ticketing capabilities.

In addition, the firms will work together to ensure AI development across the music industry ‘will protect human artistry and the economics that flow to those artists and songwriters’. TikTok says it is committed to working with Universal to remove unauthorized AI-generated music from the platform, as well as tools to improve artist and songwriter attribution.

“This new chapter in our relationship with TikTok focuses on the value of music, the primacy of human artistry and the welfare of the creative community,” said Sir Lucian Grainge, Chairman and CEO, Universal Music Group. “We look forward to collaborating with the team at TikTok to further the interests of our artists and songwriters and drive innovation in fan engagement while advancing social music monetization.”

Shou Chew, CEO of TikTok added: "Music is an integral part of the TikTok ecosystem and we are pleased to have found a path forward with Universal Music Group. We are committed to working together to drive value, discovery and promotion for all of UMG's amazing artists and songwriters, and deepen their ability to grow, connect and engage with the TikTok community."

The deal resolves a long-running licensing dispute between the firms. MBW reports that a previous agreement was set to expire on January 31 this year, and by then the firms had not agreed to terms for a new deal. As such, Universal announced it would cease licensing content to TikTok.

At the same time the music group published an ‘open letter to the artist and songwriter community’, in which it said during its contract renewal discussions with TikTok it had been pressing the platform on “appropriate compensation for our artists and songwriters, protecting human artists from the harmful effects of AI, and online safety for TikTok’s users”.

Meanwhile TikTok put out a statement in January saying: “It is sad and disappointing that Universal Music Group has put their own greed above the interests of their artists and songwriters.

“Despite Universal's false narrative and rhetoric, the fact is they have chosen to walk away from the powerful support of a platform with well over a billion users that serves as a free promotional and discovery vehicle for their talent.

“TikTok has been able to reach 'artist-first' agreements with every other label and publisher. Clearly, Universal's self-serving actions are not in the best interests of artists, songwriters and fans.”

Judging by the release today, the firms seem to have been able to resolve their issues.  

TikTok has cooperative deals of various types with a wide array of firms in the music industry and elsewhere –  such as AXS,  Ticketmaster, Amazon Music, Spotify,  Adobe, Twitch, Disney, Sony, The New York Yankees, and many more.  

Earlier this year it put out a release citing research from Oxford Economics that claimed SMB investments in paid advertising and marketing on TikTok drove nearly $15 billion in revenue in the US in 2023. SMBs on TikTok also ‘placed a significant value on the free services’ provided by TikTok, which help them grow organically, apparently. ‘These two value streams together supported a $24.2 billion contribution to the US GDP in 2023,’ it read.

Whatever else you might think about TikTok, it’s clearly by this stage not just hugely influential as a social content platform but firmly plugged into wider commerce in the US and beyond. This is worth noting in the context of ongoing attempts by US politicians to ban the social media app on the grounds of security, which if successful will presumably have a detrimental effect on its ecosystem of corporate partners as well.