Inside TikTok’s Money Squeeze on Independent Labels: ‘This Is a Classic Divide-and-Conquer Situation’
Earlier this year, when TikTok and Universal Music Group locked horns over their licensing agreement — and the world’s largest music company removed nearly all of its artists and songwriters’ work from the platform — UMG faced challenges making its case in the court of public opinion.
“TikTok proposed paying our artists and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay,” UMG chairman CEO Lucian Grainge wrote in an open letter dated Jan. 30. “Ultimately TikTok is trying to build a music-based business, without paying fair value for the music.”
Fair points. However, UMG had just trumpeted robust earnings, had approved a $150 million bonus for Grainge, and was silencing its artists and songwriters — who’d been pressured for years to find ways to “go viral on TikTok” — on the most-influential platform for music of the last five years. The ban, which began in February and lasted for three grueling months, affected songs by everyone from Harry Styles to Elton John and Ice Spice — but most affected were the non-superstar artists, many of whom had invested significant time and money in promoting their music on the platform. Popular on Variety Related Stories VIP+ How Celebrity Reps Are Fighting the Flood of Unauthorized AI Content Netflix's Bela Bajaria Shoots Down Talk of a New Film and TV Compensation Model: 'We're Not Changing'
Rather than joining the fight, UMG’s competitors rushed their artists’ music into the gap left by the ban, admitting privately that it was “great for us!” to have so much superstar competition out of the picture. But after a few weeks, music by UMG artists like Ariana Grande and Camila Cabello began quietly returning to the platform, and when Taylor Swift (who owns her masters and licenses them to UMG, and thus was not bound by its stance) began promoting her upcoming album “The Tortured Poets Department” on TikTok, UMG swiftly (sorry) announced a new agreement that it claimed will “deliver improved remuneration for UMG’s songwriters and artists, new promotional and engagement opportunities for their recordings and songs and industry-leading protections with respect to generative AI.” Call it a draw, at best.
