Industry Insights: UMG Has Pulled Its Music From TikTok — What’s Next For The Industry?

UMG’s removal of their songs on TikTok shows a shift in the relationship between social media sites and major labels. 

Written by Rachel Green

Illustrated by Catherine Elizalde

If you are one of TikTok’s 1 billion active users, you may have noticed a recent shift on the app’s For You Page. One video made a splash in early 2023 when TikTok user @dvcree posted an edit of Agent Whiskey, a character from the “Kingsmen” film franchise played by internet darling Pedro Pascal. Universal Music Group (UMG) recently muted the video, which plays Shaggy’s “Hey Sexy Lady” in the background, due to the ongoing dispute between UMG and TikTok. Nearly two months later, the two companies have yet to reach an agreement for fair use of UMG properties.

TikTok’s recent contract trouble has affected every single video on the platform that utilizes a song under UMG’s purview. As of Jan. 31, UMG, which is one of the largest music distribution groups, began pulling songs and clips of clients’ music. Not only has this affected the TikTok users’ ability to create new videos using hit songs, but videos with billions of views are now completely silent. 

While many users are upset at this change, including the musicians themselves, UMG’s strong stance is essential to ensure artists are getting royalties from social media plays. With the number of users participating in trends using others’ music, it is important to cull the use of AI deepfakes of singers’ voices and get appropriate royalties for each song’s use.

This development had been brewing for months, and it all came to a head in January. On Jan. 30, UMG issued a press release that revealed the behind-the-scenes negotiations between the two corporations. 

Photo courtesy of FOX Entertainment

The release began with an acknowledgment that much of TikTok’s success is due to the platform's music sharing and discovery culture. For instance, a clip of Cris Colfer performing the Broadway ballad “Rose’s Turn” on Glee nearly 15 years ago has recently gone viral, with TikTok users creating nearly 300,000 videos using the audio. 

Trend proliferation has benefitted from using sounds as an underscore for all video types, regardless of whether or not they align with the original sound creator's intentions. Without the trendy videos of creators lip-syncing to Kurt Hummel’s dramatic solo, Glee would not have had a spike in visibility notable enough for Colfer himself to comment on it. In a year-end report from 2021, TikTok executives acknowledged that “music is at the heart of the TikTok experience. It's the glue that connects TikTok's disparate threads, providing a throughline between individuals and communities who bring their own spin to the latest trend.”

In its press release, UMG leveraged this talking point to argue that they are “trying to build a music-based business, without paying fair value for the music.” This was a response to what UMG characterized as a bad-faith negotiation from the app. UMG stated that TikTok made an offer “worth less than the previous deal, far less than fair market value and not reflective of their exponential growth.”

TikTok’s existing royalty payout system pays less than other media companies. Reports vary — one indie label claimed that a million views on one sound resulted in a $8 payout for one of its clients, while others received three cents for each video that used their song. 

TikTok’s royalties for musicians are meager compared to industry standards. Spotify pays about $4,000 for a million streams. TikTok representatives argue that their royalty payouts are lower because only sections of the song are streamed in each video. While entire songs are available on Spotify and Apple Music, users only use song clips in their videos on TikTok. The disparity between TikTok and Spotify’s payout structures can’t be explained away by stream length alone — the two companies employ a similar structure, wherein artists are paid differently based on users’ streaming length, but Spotify still pays artists 500x more on average.

In addition to financials, many videos have been circulating using AI versions of musicians’ voices. Most of these videos are AI covers, where deepfaked versions of musicians sing covers of existing songs. Deepfaked musicians do not consent to TikTok users using their vocals in AI covers, and the musicians do not receive any royalty payments from these covers. TikTok already underpays musicians for songs they did create, so it makes sense for UMG to include anti-AI terms in their agreement to bolster artist’s rights over their own likenesses. Finally, UMG argued that TikTok withheld significant sums of money from musicians of all popularity levels. 

One of TikTok’s main arguments against UMG’s claims is that the app indirectly generates more income due to the fact that TikTok’s popularity transfers to streaming and concert revenue. In TikTok’s 2023 “Music Impact Report,” the company asserted that discovering and sharing music is an integral part of the business plan. Most notably, the internal study claims that TikTok users are more willing to pay for streaming services, attend more live concert events, and discover more new artists through the platform. However, this study ignores the significance of streams on the app itself. TikTok shorts large and small artists alike by not paying artists fair compensation for in-app plays. Even though users are more likely than average to use streaming platforms, looking at the TikTok’s success ignores the fact that many of these viewers do not go on to stream music elsewhere — in TikTok’s own report, analysts found that 38% of US TikTok users do not pay for outside streaming services 

While avid TikTok users may find song muting inconvenient, UMG took the right step to stand up for its clients. While it’s clear that TikTok has changed the music industry by gaining a large audience online for upcoming artists, there is no excuse to benefit from the art without compensating the artists appropriately. Moving forward, more music labels should advocate for their clients to receive fair compensation, even if that means pulling more music from TikTok.