Universal Music, TikTok fail to reach new licensing agreement

Universal Music Group (UMG) will cease licensing its content to TikTok and TikTok Music services, as the music label said on Tuesday that its agreement with the social media platform has not been renewed.

UMG has been pressing TikTok for appropriate artist and songwriter compensations in their contract renewal discussions, among other things, it said in a letter addressed to its artist and songwriter community.

If UMG fails to reach an agreement with TikTok, all of its songs will be removed from the service once the deal expires on Wednesday, a UMG spokesperson said.

In its letter, UMG accused TikTok of "trying to build a music-based business, without paying fair value for the music."

UMG said TikTok proposed paying artists and songwriters at a rate that is a "fraction of the rate" that similarly situated major social platforms pay.

Tiktok, in a statement to Reuters, referred to UMG's narrative as "false" and said UMG's actions were not in the best interests of artists, songwriters and fans.

TikTok accounts for only about 1 per cent of UMG's total revenue, the music label said.

The company had reached a deal with social media platform TikTok in February 2021, which allowed users on the app to be able to incorporate clips from UMG's music catalog on their videos.