Common Music Group’s feud with TikTok isn’t finding any significantly less extreme. In an earnings connect with Wednesday, CEO Lucian Grainge mainly dismissed the platform, declaring its impression, both in terms of revenue and enthusiast engagement, was not as considerable as some assume.
The audio label, which is dwelling to Taylor Swift, Girl Gaga, and Drake, among the other individuals, pulled some of its tracks from the short-kind social media juggernaut at the starting of February then this 7 days, demanded that TikTok get rid of all tunes created by Common Tunes Publishing Group’s songwriters following the two could not agree on a new licensing offer.
On a contact with analysts, UMG executives heightened their criticism of the system. CFO Boyd Muir reported income from TikTok represented just 1% of UMG’s revenue—and hinted that UMG options to work nearer with other social media channels.
“Other platforms in the social-video clip classification reach a lot higher monetization,” claimed Muir. “We’re focusing on accelerating our partnerships with YouTube, Meta, Snap, and other people.” UMG, Grainge said, was pursuing an artist-centric business enterprise model and looking for a additional aggressive setting amid tech platforms that final results in “fair compensation” for singers and songwriters.
“There ought to not be absolutely free rides for huge world platforms this kind of as TikTok that refuse to meaningfully tackle concerns all around AI, platform security, or pay back their truthful share for our artists’ and songwriters’ do the job,” Grainge explained. “That is why we are grateful for the outpouring of help not only from particular person artists and songwriters, but from artists’ legal rights companies, impartial labels and publishers, songwriters, advocacy teams, and other folks.”
TikTok disputed the removal of UMG new music as currently being artist-centric, stating in a statement that the company’s steps “not only affect the songwriters and artists that they symbolize, but now also impression a lot of artists and songwriters not signed to Common.“
The removal of songs from TikTok did not impression the fourth quarter or annual earnings, of training course. UMG claimed 2023 revenue of 11.1 billion euros (about $12 billion), a 7.4% increase compared to the year prior. The business does not look especially nervous about the impression on the coming quarter, possibly, with Michael Nash, EVP of digital system at UMG, saying it was “too early to attract any meaningful conclusions” from the elimination.
UMG also shrugged off any issues about artists dropping a link with their followers, noting that those people interactions transpired on a large variety of platforms.
“Keep in head that around 50 percent of TikTok every month active buyers by now also use other short-online video solutions,” claimed Nash. “In some marketplaces, that percentage is as substantial as 70%. These are products and services that monetize engagement at a a great deal greater charge.”
The standoff amongst UMG and TikTok will extremely most likely have broader implications all through each the audio and social media industries. Today’s tunes usually have many writers, who are frequently signed with distinctive publishers. While there’s some dispute about how a lot of the tunes on TikTok the UMG action will effect, it will be a significant sum. And if UMG is able to get the job done out favorable phrases for the return of its new music, other publishers will very likely need people identical concessions in their renegotiations with both of those TikTok and other social media channels.
TikTok, in its statement, mentioned it was doing work to conclusion the dispute. (UMG said it could not remark on husband or wife negotiations.)
“We remain fully commited to reaching an equitable settlement with Common Songs Team,” stated TikTok. “In the meantime, music lovers can keep on to appreciate, discover, and share thousands and thousands of tracks from artists, songwriters, and labels on TikTok, and we will proceed to join all artists—including those people whose songs is not at the moment obtainable on our platform—with their admirers.”
Grainge, on the connect with, nonetheless, appeared prepared to increase the TikTok ban as very long as necessary to get what UMG wishes.
“Let me be obvious, no cost doesn’t function for us,” he mentioned. “We’ve invested several years producing a path to electronic monetization in every one class. I am not prepared to compromise the long run of the social class by doing something that entirely undermines the economics for us and for every person else.”
