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Universal Music is set to pull its songs from TikTok after a breakdown in negotiations over payment, which would remove the social media platform’s access to music from stars such as Taylor Swift, The Weeknd and Drake.
Universal, the industry giant that controls a third of the world’s music, has been in tense negotiations with Beijing-based TikTok for the past year, according to people familiar with the matter.
Universal on Tuesday accused TikTok of “bullying” and said the company wanted to pay a “fraction” of the rate that other social media sites pay for access to its music catalogue. As a result, Universal said it will stop licensing its content to TikTok when its contract expires on January 31.
The big music companies earn billions of dollars a year through royalty payments from streaming services and social media sites including Spotify, Apple and Meta. They typically renegotiate these contracts every couple of years.
“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,” Universal said.
This is the first time in the modern streaming era that Universal has gone so far as to remove its music — which includes millions of songs from many of the biggest music stars — from a tech company’s platform. TikTok has soared in popularity as millions of people upload short clips of themselves on the app, often lip-syncing to music.
The Financial Times reported last month that TikTok’s parent company ByteDance made $29bn in revenues in the three months to June 2023, up about 40 per cent from the previous year. ByteDance does not publicly disclose its financial results.
“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,” Universal said. Revenue from TikTok makes up just 1 per cent of Universal’s revenue, it added.
TikTok did not immediately respond to a request for comment.
Warner Music, the third-largest record company, last year announced it had struck a new dal with TikTok.
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