During the latest earnings call, Sir Lucian Charles Grainge, Chairman & Chief Executive Officer of Universal Music Group, underscored the ongoing licensing dispute with TikTok, emphasizing the platform’s significance in fair compensation and AI safety. Grainge asserted, “massive global platforms such as TikTok must not enjoy free rides.”
Boyd Muir, UMG’s CFO and executive vp, outlined a strategic pivot towards strengthening partnerships with Meta, Snap, YouTube, and other social platforms, positioning UMG’s stance vis-à-vis TikTok.
In response to the lapse of the licensing agreement with TikTok in January, UMG cited issues of inadequate compensation and AI concerns. Muir commented, “TikTok proposed paying our artists and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay.”
TikTok’s rebuttal accused UMG of prioritizing profit over artists’ interests, fueling an impasse in negotiations and resulting in the removal of millions of UMG-controlled recordings from the platform.
The Byte Dance company expressed commitment to reaching an equitable agreement, noting the broader impact on artists and songwriters beyond UMG’s roster. In a statement, TikTok remarked, “[UMG’s] actions not only affect the songwriters and artists that they represent, but now also impact many artists and songwriters not signed to Universal Music Group.”
During the earnings call, UMG executives discussed potential revenue recapture through alternative platforms like Reels or YouTube Shorts, highlighting TikTok’s diminished role in the company’s revenue stream.
Over 900 artist’s catalogs have been affected due to the ongoing standoff between the two publicly traded companies including Bob Marley, Shaggy, Shenseea, Masicka and more. Grainge highlighted the importance of equitable deals, stating, “We like win-win situations. We’ve laid out what’s important to us, and I believe important to our industry.”
Michael Nash, UMG’s chief digital officer and executive vp, acknowledged ongoing takedown efforts on TikTok, noting minimal negative impact on the company’s broader digital business. “In general, if consumption shifts from TikTok to other short video platforms like Reels or YouTube Shorts, we believe we can, in fact, recapture some lost revenue,” he said during the call. “Keep in mind, over half of TikTok monthly active users already also use other short video services,” Nash said.
In response to the publishing takedowns, TikTok said in a statement on Wednesday, “[UMG’s] actions not only affect the songwriters and artists that they represent, but now also impact many artists and songwriters not signed to Universal. We remain committed to reaching an equitable agreement with Universal Music Group.”
Grainge downplayed TikTok’s significance in music marketing, emphasizing the broader array of platforms utilized for global promotion. He stated, “TikTok is not a material part of the multidisciplinary jigsaw, where we promote and market our music globally.”
Throughout the call, UMG refrained from commenting on ongoing negotiations with TikTok, maintaining a guarded stance on the matter.
