Striking a Chord: How the Universal Music-TikTok Deal Resonates Across Social Media

Los Angeles, Calif. (May 6, 2024) - Universal Music Group (UMG) has reached a new licensing deal with TikTok, allowing the platform's users to once again access content from UMG's vast catalog of recordings and songs. This agreement brings an end to the public, several-month-long dispute between UMG and TikTok over artist royalties and AI issues, and marks a significant development in the relationship between the music industry and social media platforms.

According to UMG’s chairman and CEO, Sir Lucian Grainge, the deal focuses on "the value of music, the primacy of human artistry and the welfare of the creative community," signaling a shift towards greater collaboration between major record labels and social media platforms.

Though the terms of the agreement have not been revealed in any meaningful detail, the agreement will reportedly provide UMG artists with new monetization opportunities, leveraging TikTok's simultaneous e-commerce and fan engagement capabilities to help them realize their potential on the platform, highlighting the growing importance of social media in the music industry for engaging fans and promoting music.

The agreement is also said to address critical issues raised by UMG during negotiations, including compensation for artists and songwriters, protections to human artists from the potentially harmful impact of AI, and online safety for TikTok's users."

The return of UMG's catalog to TikTok will impact the entire music industry, as it includes recordings and songs from the world's second-largest music publisher. This could have far-reaching consequences, potentially leading to a shift in the balance of power between the music industry and social media platforms.

The UMG-TikTok deal serves as a test case for the music industry's ability to negotiate favorable terms with social media platforms and protect the intellectual property rights of artists and labels in spite of the power, influence, and lack of regulation of platforms like TikTok. UMG's gamble could force other major labels to follow suit, potentially leading to substantive changes that benefit both the artists and the industry in the long term.

On the whole, the new licensing agreement between UMG and TikTok represents a significant development in the evolving relationship between the music industry and social media. It remains to be seen how the specific and as yet unrevealed terms of the new agreement unfold and how other industry giants may respond, but for now, we expect that the implications of this deal could have far-reaching consequences for artist compensation, AI protection, and the overall balance of power in the digital music landscape.

For more information on this development, contact the authors or editor of this alert. Visit our Entertainment, Media, & Sports Practice page to learn more about our capabilities in this area.

Authors:

Sarkis Yeretsian, Associate

Christina Stylianou, Associate

Editor:

Jason Berger, Partner