Beyoncé’s latest hit, ‘Texas Hold ‘Em’, is spending a second week at the summit of the Billboard Hot 100 chart, largely due to its prevalence on TikTok. Beyoncé now ties Pharrell as the artists with the most unique airplay chart appearances in Billboard history. They each have appeared on 18 of Billboard’s 25 airplay chart.
Over 100,000 videos have been made of the song on TikTok and “The virality of this Beyoncé record shows you the power of the platform,” says Nima Nasseri, a former vp of A&R strategy for Universal Music Group. “It’s still there. You can’t discount it,” Nima told Billboard.
Efforts to revive negotiations between TikTok and Universal Music have faltered, sources familiar with the situation reveal, leaving two titans of the entertainment industry at odds over financial compensation, copyright issues, and the treatment of AI-generated music.
This stalemate poses the risk of more artists finding their creations absent from the social media platform, which has significantly shaped music consumption trends in recent times.
Last month, Universal, which commands a sizable share of the global music market, ceased licensing its music to TikTok after a prolonged period of strained negotiations.
In recent weeks, TikTok executives, including Ole Obermann, TikTok’s head of music, Zhen Cao, the music lead at parent company ByteDance, and TikTok’s CEO Shou Zi Chew, have attempted to reignite discussions through various channels such as emails, text messages, Zoom meetings, and phone calls. However, Universal, led by digital chief Michael Nash and CEO Lucian Grainge, remains unconvinced by TikTok’s proposals.
Sources familiar with the matter disclose that during the breakdown of talks last month, TikTok had proposed to compensate Universal with a “low single-digit” percentage of its advertising revenue for music usage, encompassing the works of renowned artists like Taylor Swift, Drake, The Weeknd, and Lana Del Rey.
Although TikTok recently made a higher offer, it still falls significantly below the 20% advertising revenue share that YouTube grants to the music industry.
Another major point of contention revolves around AI-generated music. Universal advocates for TikTok’s royalty payments to benefit musicians exclusively, while TikTok seeks to distribute the “royalty pot” among both musicians and fans who utilize AI to produce their own tracks—a proposition deemed unacceptable by Universal.
In a statement on Wednesday, TikTok affirmed its commitment to achieving a fair agreement with Universal but acknowledged the necessity of complying with the music company’s directive to remove songs authored or co-authored by its songwriters.
“Their actions not only affect the songwriters and artists that they represent but now also impact many artists and songwriters not signed to Universal,” TikTok lamented.
This standoff represents one of the most contentious clashes between tech behemoths and media conglomerates in recent memory, as they vie for supremacy in shaping the future landscape of entertainment.
Major music companies rake in billions annually through royalty payments from streaming services and social media platforms such as Spotify, Apple, and Meta. Typically, these contracts are renegotiated every few years, often amid tense negotiations but almost always resulting in an agreement.
This marks the first instance in the streaming era where Universal has resorted to removing its music from a tech platform. The resolution of the TikTok-Universal dispute holds significant implications for music revenues in the years ahead.
Obermann, a former executive at Warner Music who spearheads TikTok’s negotiations with major labels, has been at the forefront of discussions. His superior at ByteDance, Zhen, has also been actively involved, though communication at times appears disjointed, according to sources. Chew, TikTok’s CEO based in Singapore, has also engaged with Universal in attempts to revive negotiations.
This impasse has deprived Universal artists of their primary promotional tool, while TikTok users witness a mass muting of their posts.
Interestingly, Beyoncé, signed with Universal’s competitor Sony, is now reaping the benefits from the standoff.
Nevertheless, the expanded removal of licensed tracks last week will impact even artists unaffiliated with Universal, including Beyoncé. TikTok commenced removing songs tied to Universal’s publishing arm, affecting artists collaborating with songwriters under Universal’s umbrella.
Experts estimate that 60-80% of all popular music on TikTok could be muted, though TikTok disputes this, suggesting the figure is closer to 30%.
Sources close to TikTok assert that the platform has not witnessed a decline in users following the removal of Universal’s catalogue but stress that the dispute is detrimental to the broader industry.
During Universal’s earnings call on Wednesday, Grainge expressed willingness to negotiate, emphasizing the company’s history of fostering mutually beneficial arrangements with various platforms.
As the call began, Sophie Ellis-Bextor’s “Murder on the Dance Floor,” a song owned by Universal, played in the background—a track that gained widespread popularity on TikTok in recent months.
