TikTok vs. UMG: A divorce that changes everything

TikTok, the popular short-form video app, and Universal Music Group (UMG), the world’s largest music company, have parted ways after failing to agree on a new licensing deal. This means that some of the most popular songs by artists like Taylor Swift, Drake, Justin Bieber, and Adele will no longer be available on TikTok. But beyond the immediate impact on TikTok users and UMG artists, this breakup could have far-reaching implications for the music industry and the role of artificial intelligence (AI) in content creation. Here are some of the key trends and challenges that emerge from this dispute.

Licensing Contract Dispute

UMG announced its decision to withdraw its artists’ songs from TikTok in a furious open letter, accusing the social media platform of trying to “bully” and “intimidate” them into accepting a deal worth less than the previous deal, far less than fair market value, and not reflective of TikTok’s exponential growth. UMG claimed that TikTok accounts for only about 1% of its total revenue, which shows how little TikTok compensates artists and songwriters, despite its massive and growing user base, rapidly rising advertising revenue, and increasing reliance on music-based content.

TikTok responded with a statement of its own, calling UMG’s move “sad and disappointing” and accusing the music company of putting its own greed above the interests of its artists and songwriters. TikTok said that it has been working to offer fair and competitive terms to UMG and that it has been a valuable partner for the music industry, driving discovery, chart success, and revenue for artists. 

The licensing dispute between TikTok and UMG reflects the ongoing tension between music rights holders and digital platforms that use music as a core feature. As streaming services and social media apps become more popular and influential, music companies seek to secure higher royalties and better terms for their artists, while platforms try to balance their costs and profits. The outcome of this conflict could affect the future of music distribution and consumption, as well as the relationship between artists and fans.

Compensation Concerns

One of the main issues that UMG raised in its letter was the compensation that TikTok offers to its artists and songwriters. UMG argued that TikTok’s proposed rate was a fraction of the rate that similarly situated major social platforms pay and that TikTok tried to selectively remove the music of some of its developing artists while keeping bigger stars on the platform.

This raises the question of how artists and songwriters should be paid for their work in the digital age, especially when their music is used in short-form videos that may generate little revenue for them. Some artists have expressed frustration with the low royalties they receive from streaming services and social media apps, while others have embraced the exposure and engagement they get from these platforms.

According to a report by the UK Parliament, streaming platforms pay about £0.005 per stream to music rights holders, who then distribute the money among labels, publishers, artists, and songwriters. The report also found that social media platforms pay even less, and that there is a lack of transparency and accountability in the way these payments are calculated and distributed. The report recommended that the government should introduce legislation to ensure fair remuneration for music creators and to protect their rights.

Royalty Dilution

Another issue that UMG brought up in its letter was the proliferation of AI-generated music on TikTok, which they argue dilutes the royalty pool for human artists, impacting their earnings. AI-generated music refers to music that is created by algorithms and data sets, without human intervention or input. AI music generators use complex algorithms and vast databases of music to create new compositions, analyzing rhythm, melody, and harmony patterns and using this information to produce new pieces.

AI-generated music has been gaining popularity and attention in recent years, as more platforms and tools emerge to offer this service. For example, Jukebox is a neural net that generates music, including rudimentary singing, as raw audio in a variety of genres and artist styles6 Soundraw is an AI music generator that allows users to create beats with the power of AI, choosing the mood, genre, and length of the song. Media.io is an AI music generator that can transform text, sentences, or words into diverse musical genres and styles instantly.

AI-generated music poses both opportunities and challenges for the music industry and the role of human artists. On one hand, AI-generated music can offer new possibilities for creativity, experimentation, and personalization, as well as lower costs and barriers to entry for music production. On the other hand, AI-generated music can raise ethical, legal, and artistic questions, such as who owns the rights and royalties of AI-generated music, how to ensure the quality and originality of AI-generated music, and how to preserve the human element and expression in music.

Artist Replacement Concerns

The development and encouragement of AI-generated music also raise concerns about the potential for technology to replace human artists, altering the traditional dynamics of the music industry. Some fear that AI-generated music could threaten the livelihood and relevance of human artists, especially those who are less established or popular, as platforms and consumers may prefer cheaper and more accessible AI-generated music.

Others argue that AI-generated music could complement and enhance human artists, rather than compete with them, as AI could provide new tools and inspiration for music creation, as well as new ways of engaging with fans and audiences. Some artists have already collaborated with AI to produce music, such as Taryn Southern, who released the first album composed and produced entirely by AI, called I AM AI, in 2018. Other artists have used AI to generate lyrics, melodies, or sounds for their songs, such as YACHT, who used a neural network to create their 2019 album Chain Tripping.

The impact of AI-generated music on human artists may depend on how the music industry and the public perceive and value AI-generated music, as well as how human artists adapt and respond to the changing landscape of music production and consumption. AI-generated music may not be able to fully replicate the emotional, social, and cultural aspects of human music, but it may also challenge and expand the definition and boundaries of music as an art form.

Navigating Generative AI

Both artists and companies are faced with the challenge of leveraging generative AI for content creation while ensuring the protection and fair compensation of existing artists’ work and earnings. Generative AI refers to AI systems that generate new content or data, such as text, images, audio, or video, based on existing data or inputs. Generative AI can be used for various purposes, such as entertainment, education, research, or marketing.

However, generative AI also poses risks and challenges, such as the potential for misuse, abuse, or manipulation of the generated content, the difficulty of verifying the authenticity and quality of the generated content, and the uncertainty of the legal and ethical implications of the generated content. For example, generative AI could be used to create deepfakes, which are synthetic media that manipulate or fabricate the appearance or voice of a person or an event, often with malicious intent. Generative AI could also be used to infringe or violate the intellectual property or privacy rights of existing content creators or owners, or to generate content that is harmful, offensive, or misleading.

Therefore, both artists and companies need to be aware and cautious of the benefits and drawbacks of generative AI, and to develop and follow best practices and guidelines for using generative AI responsibly and ethically. Some of the possible measures include establishing clear and transparent policies and standards for generative AI, ensuring the consent and attribution of the original content creators or owners, implementing quality control and verification mechanisms for generative AI, and educating and informing the public and the users about generative AI and its implications.

Conclusion

The breakup between TikTok and UMG is more than just a licensing dispute. It reflects the changing and challenging landscape of the music industry and the role of AI in content creation. As music becomes more digital and diverse, both artists and companies need to navigate the opportunities and risks of generative AI, and to find new ways of creating, distributing, and consuming music that are fair, sustainable, and innovative.