Recently, Tiktok announced that it has pulled all music licensed to Universal Music Group (UMG) such as big-name artists like Taylor Swift, BTS, Drake, and Olivia Rodrigo. Any videos containing music licensed by Universal have been muted.
UMG took a stand against TikTok in an open letter, accusing the platform of underpaying artists, arguing that TikTok’s compensation model doesn’t fairly share the platform’s success with the creators who fuel it.
The letter also criticized TikTok for allowing and even encouraging the creation and spread of AI-generated music, which UMG sees as a threat to legitimate artists.
The argument about TikTok’s unfair compensation model
Addressing artist compensation, the letter reveals that TikTok proposed a payout rate significantly lower than what other major social platforms offer. To be exact, despite its booming user base, soaring ad revenue, and heavy reliance on music content, TikTok only contributes a measly 1% to UMG’s total income.
This information suggests, according to UMG, that TikTok is exploiting music’s value without fairly compensating the creators.
TikTok responded to Universal Music Group’s claims on social media, accusing them of spreading “untrue information” and focusing on “financial gain over supporting their artists and songwriters.”
How will this impact TikTok in the short and long term? Is this the start of a deeper conversation about compensation and AI? More to come on this.
