TikTok and Universal Music have recently reached a groundbreaking agreement, putting an end to their prolonged disagreement over compensation. This new licensing deal will see the return of Universal Music's artists and their music to the popular video-sharing app TikTok, after they were removed due to payment disputes.
The agreement, which comes after months of negotiations, ensures that artists under Universal Music, including big names like Billie Eilish and Ariana Grande, will receive improved remuneration for their work. The previous licensing contract between the two entities expired at the end of January, leading to Universal Music pulling its artists' content from TikTok in early February.
The move by Universal Music to withdraw its content from TikTok was unusual and drew attention to the issue of how much the platform pays artists. This move impacted the availability of Universal Music's vast music catalog to TikTok's one billion-plus users worldwide.
Following the announcement of the new deal, Universal Music's shares experienced a nearly 2% increase in Amsterdam. Analysts at Citi noted that the agreement was surprising, given the contentious nature of the previous negotiations.
The dispute between TikTok and Universal Music became public when Universal Music accused TikTok of proposing payment rates far below what other major social platforms offer. In response, TikTok accused Universal Music of prioritizing its own interests over those of its artists and songwriters.
Lucian Grainge, the CEO of Universal Music, has long been a vocal advocate for fair compensation for artists and songwriters. He expressed his satisfaction with the new agreement, stating that it would serve the interests of Universal artists.
Under the new deal, TikTok and Universal Music will collaborate to promote and monetize artists' content, leveraging TikTok's growing e-commerce capabilities. TikTok has also committed to developing tools to help artists better engage with their fans.
Both companies have agreed to focus on protecting artists' work from unauthorized use, including deploying tools to improve attribution and prevent the spread of AI-generated music. This partnership marks a significant step forward for both TikTok and Universal Music, ensuring fair compensation for artists and a fruitful collaboration moving forward.