TikTok without songs by the Beatles, the Rolling Stones, Coldplay, Lady Gaga and Taylor Swift? Hardly imaginable. But it should become a reality, because Universal, the label that holds the exploitation rights for those mentioned and countless other musicians and bands, wants to remove its music from the Chinese social media ramp. Around seven million songs are affected, which would then no longer be available to users for use, but which would also no longer receive a marketing platform, as the label giant was subsequently given a gift.
It is still unclear whether all of this will actually happen. The fact is that a deadline for the conclusion of a new exploitation agreement between TikTok and Universal expired on Wednesday (January 31st). Rather, Universal deliberately allowed it to be phased out. Why? The record company claims that TikTok only offered musicians and songwriters a “fraction of the compensation available on similar other online platforms”. You only earn one percent of your sales with TikTok – with the outsized presence of your licensed music on the site compared to others. The compensation figures cannot be verified, there is no freely accessible data and both TikTok and Universal are silent on the topic.
It’s about money and prestige
This opens a battle that will also concern other labels. Because – like many other battles in the industry in recent years, from Napster to Spotify – it’s about money. Lot of money. Anyone who captures people and data with music should also pay. At least that is the opinion of Universal and certainly other players in the business area who have so far swallowed the problems with TikTok because they considered the advantages to be more important.
Because as Universal made clear in its comprehensive statement, there are other difficulties with the social media app, which is particularly popular among young people around the world. Too many pirated copies and sometimes questionable content between political propaganda and pornography are just one thing. But according to the record label, TikTok favors big bands and musicians over others, and even cuts out smaller acts completely and at its own discretion. “TikTok is using the power of its platform to harm vulnerable artists and trying to intimidate us into agreeing to a bad deal that undervalues music and disadvantages artists and songwriters and their fans.”
If Universal puts all of this into practice, it will be a difficult undertaking, even like cutting off the head of a hydra. The main problem is not the quickly deleted library of music tracks, but rather the ability of users to independently upload (short) clips of music. It is still completely unclear what technical and legal problems this will cause. However, this approach could develop into a dispute because Universal is openly questioning TikTok’s business model.
TikTok accuses Universal of greed
This is probably why those responsible for the app, which belongs to the ByteDance company based in Beijing and is also suspected of spying on its users in order to forward data to the Chinese government, are reacting with a riot. Universal puts “its own greed above the interests of its artists and songwriters,” says the powerful answer, which suggests no interest in negotiating. An agreement of interest worked out with every other label.
Another passage is even clearer: “Despite Universal’s misrepresentation and rhetoric, the fact is that they have chosen to forego the powerful support of a platform with well over a billion users that serves as a free advertising and discovery forum for their talents serve.”
This conflict only once again raises the question of who is a chef and who is a waiter in the music business. Certainly, many musicians have received immense attention via TikTok in recent years. They were able to conclude contracts that brought them amounts of money that would not have been possible without the social media website and that created much more independence than their predecessors.
Universal now wants to force a change in times with which TikTok will at least be leveled into the existing digital markets and will no longer enjoy special rights. This could mean a change, especially for users, if the label follows through on its threat and receives support from other record companies. At the same time, the question remains as to whether the arguments also presented by Universal – such as the failure to remove contemptuous posts – really represent the core of the problem.
Or whether the actual danger may not even be mentioned out loud. This would be the completely limitless application of AI that could secure TikTok’s freedom from the business interests of the labels in the future by means of virtually created music based on trillions of data. Understandably, that would be existentially threatening for Universal and Co. It’s probably just the first round in the TikTok war.