Last week, licensing talks between social media powerhouse TikTok and behemoth record label Universal Music Group, aka UMG, broke down.
UMG was asking TikTok for a revamped licensing deal that paid artists whose work is featured on the platform (and their record labels) a larger share of TikTok’s profits.
However, the two companies couldn’t get a compromise which they could both get behind to the bargaining table. As a result, UMG told TikTok to start pulling both user-made videos featuring UMG artists’ work and official video clips from the site.
The result, as of the publication of this article, is an eerily silent TikTok with a legion of muted or outright missing videos, to whose number more are being added every minute.
Groups and artists from the Beatles to Taylor Swift to BTS to Drake are impacted. TikTok power users aren’t thrilled about the sudden change, and are clapping back in their own ways, as we’ll explore in more detail later.
For now, let’s just say they have questions, which seem to fall largely into one of two main buckets. Is UMG just bullying TikTok into doing its bidding or suffering the consequences?
Or is TikTok refusing to fairly compensate musical artists for their work?
As usual, the answer is more complex and complicated than one or the other.
Also, it’s important to remember that faceoffs between music labels and social media are literally as old as social media itself and tend to flare up about every 6-18 months on average as contracts run out and deals are negotiated, renegotiated, and revised.
Let’s take a closer look at the genesis of the UMG/TikTok rift and how it stacks up against other notorious record label/social media collisions of the past to see if we can forecast how this one is going to shake down!
UMG Says…
UMG is one of the three biggest record labels in the world. As of 2010, the company was THE biggest and controlled roughly 35% of all copyrighted music in the US with a roster of thousands of acts and millions of songs. While these numbers have changed over time due to mergers, acquisitions, sell-offs, and the emergence of new talents, UMG still remains #3 on the list and retains a huge amount of market influence, largely thanks to the sheer volume of big-name acts’ works the company controls.
UMG has never been shy about using its financial and political muscle to get its way. In the past, it has wrangled with YouTube, Facebook, and MySpace over issues ranging from outright copyright infringement to what the label termed unfair or disadvantageous licensing deals for UMG, and consequently its artists.
With the case of UMG vs. TikTok, things are a bit more nuanced than usual. UMG is not only taking aim at the compensation TikTok was offering for users’ access to the UMG music catalog, which UMG stated in an open letter amounts to “trying to build a music-based business, without paying fair value for the music” by “paying our artists and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay.” Additionally, UMG claimed that lesser-known UMG artists’ platforms and works had been quietly taken down or muted (“shadow-banned,” in the parlance of Redditors) ahead of the announcement that UMG music holdings would no longer be usable on TikTok, while the bigger names who were less likely to miss the additional views, clicks, and associated income remained largely untouched until the failure of the talks became official. As one final jab, UMG also stated that it is concerned about rampant AI usage, which TikTok is bullish on, and how AI might be employed to undercut artists by creating soundalike deep-fakes and otherwise infringe on UMG copyrights. TikTok’s stance on AI, according to UMG, is “nothing short of sponsoring artist replacement by AI” because TikTok is “demanding a contractual right which would allow [AI-generated] content to massively dilute the royalty pool for human artists.”
But are these arguments compelling? TikTok doesn’t think so.
TikTok Says…
Since its inception, one of the biggest draws of TikTok for users has been its ability to publish short clips, often featuring music. Whether it was a bridal party jamming out to Beyonce’s wedding-dance megahit “Single Ladies” or a guy in his garage strumming a ukelele to make their own version of Radiohead’s “No Surprises,” music and TikTok have been more or less inseparable.
However, TikTok feels that UMG’s stance on several of the key issues in play here is over the top and completely ignores the importance of social media to connect artists with the general user base and vice versa. In a brief but stinging rebuttal to UMG’s open letter, TikTok accused UMG of “put[ting] their own greed above the interests of their artists and songwriters” by choosing “to walk away from the powerful support of a platform with well over a billion users that serves as a free promotional and discovery vehicle for their talent.” It goes on to say that “TikTok has been able to reach ‘artist-first’ agreements with every other label and publisher.”
The problem here is that TikTok’s statement doesn’t address the AI issue, with its plethora of copyright infringement possibilities. It also strongly implies that TikTok believes its position as a medium of communication between artist and user, and its status as a “free promotional and discovery vehicle” means that it shouldn’t have to pay the market rate for licensing the protected content the company and its users rely upon.
At first glance, this whole thing would seem to be two ludicrously large and lucrative companies accusing each other of bullying. But there’s still two other sides to this story which could swing its outcome either way–TikTok’s users, and the law.
The Users Say…
On February 1st, TikTok users started their social media days by finding that content including UMG artists or music was disappearing off the site quickly. “Swifties” were among the first and most vocal to come out, wondering why their favorite icon had suddenly vanished from an entire social media platform. Some reacted quickly, posting homemade versions of their favorite tracks to show support for Taylor Swift or other acts while also demonstrating their own musical chops. Others have played with adjusting the speed and pitch of official tracks enough to game the license-detection software, with results ranging from hilarious to disturbing. Still others have added stock music in place of the actual tracks on the videos to compensate for TikTok’s auto-muting of the now-unlicensed material.
Most users seem to agree that, while annoying, this feud won’t last long, and history seems to bear this notion out. Typically, licensing disputes of this kind, while acrimonious and public, tend to be resolved in a matter of a day or two to a few months. It seems unlikely that UMG is going to close off a revenue stream any longer than necessary, even one that accounts for only 1% of UMG’s overall earnings, if the company’s figures are accurate.
However, what many fans overlook is that at this moment, with UMG catalog songs and acts off-limits to TikTok, they may themselves be committing copyright infringement, even with the best of intentions. And the law has quite a bit to say about this whole thing, which could well end up being litigated in the courts long after UMG and TikTok bow to the inevitable and decide to become friends again.
The Law Says…
As the copyright owner of record, UMG has the right to grant or refuse licenses to any or all of its catalog which is covered by copyright to anyone it wishes, for any reason. The only real checks on UMG’s power are the extant licensing agreements currently in force between itself and other entities, such as artists and other publishing companies. As long as both/all parties hew to the letter of the agreements, there’s no problem and no conflict in the eyes of the law. Copyrightable material, much like patents and trademarks, create a time-limited monopoly for the creator or the copyright holder, who need not be one and the same and frequently aren’t, especially when you get into the deep details of music industry dealings.
It’s this last point that may end up being the rub for users and TikTok. When a song or piece of music is copyrighted, the copyright typically has two elements: the written material and the performance element. Typically, one need not secure a license for either element to, for example, break out the guitar at the family reunion and play an acoustic version of “Sweet Child O’ Mine,” because this would be a) a private performance and b) not done for profit. If those elements change to a public, for-profit performance, that is a very different matter. The performer would need to secure at the very minimum a performance license in order to comply with the law and the rights of the copyright holder.
Social media is normally held to be a public medium, and so performance or dissemination of copyrighted material on social media would generally count as a public performance for purposes of copyright law. However, there’s also the question of whether it’s for profit. Someone singing a karaoke version of “Blank Space” is unlikely to have the same copyright issues (or any) as someone who presents their own arrangement of “Antihero” and links to their own online store in the content, which would create a de facto admission of public performance for profit. This means that the end user, not TikTok, would ultimately be liable for any infringement the courts determined had occurred, provided that TikTok complied with any DMCA takedown notices and other copyright actions presented by the rightful owners of the material in question. For well-meaning Swifties and other UMG acts’ fans, their show of support for their faves could easily land them in legal hot water, unless they’re very careful.
The Bottom Line
I would be very surprised if this friction between UMG and TikTok lasts more than a month or two. Both companies have assets and capabilities that the other company needs or wants, and it’s probable that there will be an internal push by artists on the UMG side to get the company back to the bargaining table so the artists can resume a huge communications channel with their fans.
However, TikTok has something of a reputation for being a maverick even in social media circles, where “maverick” is practically an essential qualification. TikTok could decide to take a hard line with UMG on the notion that UMG needs TikTok more than TikTok needs UMG, especially if TikTok believes that by doing so, it can renegotiate more favorable terms with the rest of the Big Five music publishers. If that proves to be the case, everything is up for grabs.
Finally, of course, is the question of the legal ramifications for the users who are posting their homemade versions of UMG songs right now. In most cases, this probably won’t amount to much, but those who style or bill themselves as professional music artists in their own right may find they have unexpected issues to deal with in court. I would certainly not suggest anyone test the limits of this hypothesis, simply because it’s entirely possible they could end up being the sort of fringe test case that makes copyright law so impenetrable to the layperson. Let the storm blow over, find out what the licensing agreements say, and then post away to your heart’s content in accordance with them, but please don’t roll those dice.
No matter how this dispute turns out, it’s sure to rewrite how we understand copyright licensing law, so this is definitely a case to keep a close eye on!
About John Rizvi, Esq.
John Rizvi is a Registered and Board Certified Patent Attorney, Adjunct Professor of Intellectual Property Law, best-selling author, and featured speaker on topics of interest to inventors and entrepreneurs (including TEDx).
His books include “Escaping the Gray” and “Think and Grow Rich for Inventors” and have won critical acclaim including an endorsement from Kevin Harrington, one of the original sharks on the hit TV show – Shark Tank, responsible for the successful launch of over 500 products resulting in more than $5 billion in sales worldwide. You can learn more about Professor Rizvi and his patent law practice at www.ThePatentProfessor.com
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