EXPLAINER: How UMG’s removal of music catalogue from TikTok will affect their Nigerian artistes?

Universal Music Group (UMG) on Tuesday threatened to remove all of the music it owns from TikTok — except the streaming service agrees to more favorable licensing terms for its vast catalogue.

UMG, one of the largest music companies in the world — in a scathing open letter titled “Why we must call time out on TikTok” — accused the streaming platform of attempting to “bully” and “intimidate” them into “accepting a deal worth less than the previous deal, and not reflective of their exponential growth”.

In February 2021, UMG entered a partnership with TikTok that it said would “deliver equitable compensation for recording artistes and songwriters and significantly expand and enhance the companies’ existing relationship, promoting the development of new innovative experiences”.

But in the letter dated January 30 and addressed to the “artiste and songwriter community,” UMG disclosed that its negotiations for a new contract with TikTok ended without an agreement. It added that the deal which expired on January 31 will not be renewed.

The music company said it failed to reach new deal terms with TikTok over issues including “higher compensation for its artistes and songwriters, protection against AI-generated recordings, and online safety issues for users”.

UMG claimed that TikTok proposed paying its artistes “a fraction of the rate that similarly situated major social platforms pay,” and that the service “has offered no meaningful solutions” to content issues like “bullying, bigotry, and harassment, including pornographic deepfakes of artistes”.

The music company alleged that the streaming giants tried to “intimidate” them “by selectively removing the music of certain of our developing artistes” while keeping their top stars on the platform.

Read the full letter below:

Our core mission is simple: to help our artists and songwriters attain their greatest creative and commercial potential.  To achieve these goals, our teams employ their expertise and passion to strike deals with partners all around the world, partners who take seriously their responsibilities to fairly compensate our artists and songwriters and treat the user experience with respect.

One of those partners is TikTok, an increasingly influential platform with powerful technology and a massive worldwide user base.  As with many other platforms with whom we partner, TikTok’s success as one of the world’s largest social platforms has been built in large part on the music created by our artists and songwriters.  Its senior executives proudly state publicly that “music is at the heart of the TikTok experience” and our analysis confirms that the majority of content on TikTok contains music, more than any other major social platform.

The terms of our relationship with TikTok are set by contract, which expires January 31, 2024. In our contract renewal discussions, we have been pressing them on three critical issues—appropriate compensation for our artists and songwriters, protecting human artists from the harmful effects of AI, and online safety for TikTok’s users.

We have been working to address these and related issues with our other platform partners.  For example, our Artist-Centric initiative is designed to update streaming’s remuneration model and better reward artists for the value they deliver to platforms.  In the months since its inception, we’re proud that this initiative has been received so positively and taken up by a range of partners, including the largest music platform in the world.  We’ve also moved aggressively to embrace the promise of AI while fighting to ensure artists’ rights and interests are protected now and far into the future.  In addition, we’ve engaged a number of our platform partners to try to drive positive change for their users and by extension, our artists, by addressing online safety issues, and we are recognized as the industry leader in focusing on music’s broader impact on health and wellness.

With respect to the issue of artist and songwriter compensation, TikTok proposed paying our artists and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay.  Today, as an indication of how little TikTok compensates artists and songwriters, despite its massive and growing user base, rapidly rising advertising revenue and increasing reliance on music-based content, TikTok accounts for only about 1% of our total revenue.

Ultimately TikTok is trying to build a music-based business, without paying fair value for the music.

On AI, TikTok is allowing the platform to be flooded with AI-generated recordings—as well as developing tools to enable, promote and encourage AI music creation on the platform itself – and then demanding a contractual right which would allow this content to massively dilute the royalty pool for human artists, in a move that is nothing short of sponsoring artist replacement by AI.

Further, TikTok makes little effort to deal with the vast amounts of content on its platform that infringe our artists’ music and it has offered no meaningful solutions to the rising tide of content adjacency issues, let alone the tidal wave of hate speech, bigotry, bullying and harassment on the platform. The only means available to seek the removal of infringing or problematic content (such as pornographic deepfakes of artists) is through the monumentally cumbersome and inefficient process which equates to the digital equivalent of “Whack-a-Mole.”

But when we proposed that TikTok takes similar steps as our other platform partners to try to address these issues, it responded first with indifference, and then with intimidation.

As our negotiations continued, TikTok attempted 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.  How did it try to intimidate us?  By selectively removing the music of certain of our developing artists, while keeping on the platform our audience-driving global stars.

TikTok’s tactics are obvious: use its platform power to hurt vulnerable artists and try to intimidate us into conceding to a bad deal that undervalues music and shortchanges artists and songwriters as well as their fans.

We will never do that.

We will always fight for our artists and songwriters and stand up for the creative and commercial value of music.

We recognize the challenges that TikTok’s actions will cause, and do not underestimate what this will mean to our artists and their fans who, unfortunately, will be among those subjected to the near-term consequences of TikTok’s unwillingness to strike anything close to a market-rate deal and meaningfully address its obligations as a social platform. But we have an overriding responsibility to our artists 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.

We honor our responsibilities with the utmost seriousness. Intimidation and threats will never cause us to shirk those responsibilities.

TikTok fires back at UMG

TikTok is one of the most lucrative social media platforms, raking in billions of dollars each year from ad revenue and its e-commerce business — with music a major part of its attraction; since it allows millions of creators access to hit songs for their content.

But in a blistering response to UMG, the streaming giants accused the music company of “putting their greed above the interests of their artistes and songwriters”.

TikTok, owned by Chinese internet conglomerate ByteDance, also claimed UMG is promoting “false narratives and rhetoric”.

“It is sad and disappointing that Universal Music Group has put their own greed above the interests of their artistes and songwriters,” it wrote.

“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 artistes, songwriters and fans.”

How the TikTok/UMG disagreement will affect Nigerian artistes

The development has the potential to affect TikTok’s over one billion users as well as UMG’s hundreds of singers and songwriters across the world.

Notable artistes on UMG labels include Drake, Taylor Swift, Bad Bunny, Sting, The Weeknd, Alicia Keys, SZA, Steve Lacy, Billie Eilish, Kendrick Lamar, Rosalía, and Harry Styles.

Others are Ariana Grande, Justin Bieber, Adele, U2, Elton John, J Balvin, Brandi Carlile, Coldplay, Pearl Jam, Bob Dylan and Post Malone.

UMG Nigeria is the West African division of the global record label with corporate headquarters in Hilversum, Netherlands, and its operational headquarters in Santa Monica, California, United States. Some Nigerian artistes on its roaster are Nonso Bassey, Mr. Eazi, Tekno, Larry Gaaga, and Tiwa Savage.

If the two companies cannot reach an agreement, music by these artistes will no longer be available for use in videos on the social media platform. Also, thousands of existing videos featuring those songs will be potentially muted.

Without a doubt, TikTok is one of the fastest-growing social media networks in Nigeria. It has also helped amplify Nigerian music to a global audience. For example, CKay gained worldwide recognition with ‘Love Nwantiti’. The hit song first appeared on his 2019 extended play. But it took two years from that appearance for the song to gain mass popularity, many thanks to TikTok.

In March 2022, ‘Love Nwantiti’ topped the inaugural list of Billboard’s first-ever Afrobeats music chart in the United States. It also fetched CKay a nomination in the ‘International Song of the Year’ category of the 2022 Brit Awards. The song topped charts across Europe, Africa, Australia, and New Zealand. It also reached number 23 in the UK and earned him his first entry on the US Billboard Hot 100.

TikTok has also created a fair playing field for budding singers to enjoy the attention of its over a billion users. Last year, Guchi, the fast-rising Nigerian singer, disclosed that TikTok is amplifying her music and giving her a unique way to engage with her global audience.

“I am humbled and grateful for the love and support I have received on TikTok,” she said.

“The platform has allowed me to connect with fans from all over the world, and their creativity never ceases to amaze me.

“TikTok has truly amplified my music and provided me with a unique way to engage with my audience.”

UMG, on the other hand, has been instrumental in the production and distribution of the most critically acclaimed and commercially successful music — including some Afrobeats songs — across the world.

In 2019, Tiwa Savage revealed how her deal with UMG amplified her music to over 60 countries.

She said joining the music group “is also an opportunity for Afrobeats songs to thrive evenly alongside other international genres of music”.

Aside from the global popularity that these two companies offer Nigerian artistes, their dispute will also have a monumental aftermath on the financial benefits enjoyed by Afrobeats stars.

In its letter, UMG claimed, “TikTok proposed paying our artistes and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay”. This implies that UMG artistes get paid for allowing their songs to be used on TikTok — a benefit that will also be relinquished from Nigerian singers.

As of the time of this report, it remains to be seen if there are ongoing discussions between UMG and TikTok.