universal music group
Page: 5
The Universal Music Group announced the formation of a new division, called the Global Impact Team, that will oversee the music conglomerate’s efforts to promote positive community engagement, environmental sustainability and other related efforts, the company announced today (June 3). The team will be led by Susan Mazo, formerly executive vp of social responsibility, events and special projects, who has been promoted to executive vp/chief impact officer.
Joining the new department will be former music journalist and GreenBiz Group executive Dylan Siegler, who has been named senior vp/head of sustainability at UMG; senior vp and executive director of UMG’s Task Force for Meaningful Change Dr. Menna Demessie, who will be part of the leadership group; Markie Ruzzo, who has been promoted to vp of global impact; and Sharlotte Ritchie, former senior director of communications and head of the U.K. chapter of the Task Force for Meaningful Change, who has been named senior director of global impact and communications. In addition, the social impact marketing agency Inside Projects, founded by Kristin Jones and Arielle Vavasseur which has worked with Netflix, Spotify and the Obamas’ Higher Ground Productions, has made UMG its exclusive partner for the music industry.
“The formation of the Global Impact Team reflects our commitment not only to accelerating our work in these critical areas but to do so in a way that leverages the experience and talent of these exceptional individuals to drive positive impact across our company, our industry and in the communities in which we serve,” UMG chairman/CEO Lucian Grainge said in a statement. “With this new structure we are ensuring that these functions are not siloed, but rather positioned to meaningfully influence all aspects of our global strategy.”
Trending on Billboard
Mazo has been at the forefront of UMG’s efforts in this area since joining the company a decade ago, having co-created the music group’s Amplify Award to honor artists working towards positive change and serving as the founding chair of UMG’s All Together Now Foundation, which works to bring about meaningful change across the globe. In a statement, she said she was honored to lead the new team on behalf of UMG.
“Through our work we’ve demonstrated that sustainability, community engagement and corporate social impact go hand-in-hand with delivering positive results for our employees, artists and shareholders,” Mazo said. “With this next evolution of our team and structure, and with Sir Lucian’s constant encouragement and focus, I’m excited to create and implement a new approach that unites all of the efforts in a way that will amplify UMG’s global impact and brand resonance given our unique position to enact positive change.”
Universal Music Group (UMG) shareholders approved CEO Lucian Grainge‘s 138.8 million euros ($128 million) compensation package from 2023 in a nonbinding advisory vote at the company’s annual general meeting in The Netherlands on Thursday (May 16).
Explore
Explore
See latest videos, charts and news
See latest videos, charts and news
A majority of investors voted to approve all proposals up for a vote this year, including the reappointment of billionaire Bill Ackman, Cyrille Bollore and others as non-executive directors despite criticism from shareholder advisory groups Glass Lewis, who last month called UMG’s pay practices excessive and said the board lacked independence.
Advisory shareholder votes like these are only advisory and not enforceable, but they are closely watched as indicators of investors’ feelings on a company’s pay policies and the people who make up their boards. Anytime a significant percentage of investors expresses disapproval, which Glass Lewis defines as 20% or more, directors consult with shareholders about how to make internal changes to address their concerns.
Trending on Billboard
Investors in Live Nation and Cumulus Media used recent shareholder meetings to vote their disapproval of those companies’ CEO pay packages.
UMG did not immediately disclose the percentage of votes cast in support of the proposals at this year’s annual meeting, which was livestreamed only to registered shareholders. Last year, a slim majority of UMG investors representing roughly 59% of shares voted in approval of UMG’s remuneration policy, which details the 2023 compensation packages paid out to Grainge and deputy CEO Vincent Vallejo.
About 58% of UMG’s voting shares are collectively held by Ackman’s Pershing Square Capital Management, Tencent, Bollore and Vivendi. Last year, all four shareholders voted to approve UMG’s remuneration policy.
Grainge’s total 2023 compensation is 138,814,000 euros, or $128,264,000 based on a monthly average foreign exchange rate of 0.924. In 2022, he was the third highest-paid music executive, having made total compensation of 47.3 million euros ($49.7 million) thanks to a 28.8 million euros ($30.3 million) performance bonus in addition to a base salary of 15.4 million euros ($16.2 million).
In 2023, Grainge had a base salary of 7.5 million euros (just over $8 million) and bonus of 15.16 million euros (nearly $16.3 million), and a one-time transition equity award worth 92,406,852 euros (roughly $100 million). That award was paid out in half in restricted stock units and half in performance stock options. The performance stock options vest over the coming five years and can only be excised once UMG’s stock hits certain thresholds.
Glenn Peoples contributed reporting.
Universal Music Group’s three-month hiatus from TikTok ended this week after the companies reached a new, multi-faceted licensing agreement. On Thursday, UMG executives explained why it was worth the wait.
The bottom line: UMG believes its new licensing deal with TikTok is an improvement over the deal that expired at the end of January. UMG has “substantially improved the total value we’ll derive from this relationship,” CFO Boyd Muir said. Michael Nash, executive vp/chief digital officer, said the new TikTok deal “definitely deliver[s] a fair level of value relative to other short form social platform partners,” which includes Instagram Reels, YouTube Shorts and Snap.
In Thursday’s earnings call and CEO Lucian Grainge’s internal memo obtained by Billboard the same day, Grainge, Muir and Nash mentioned numerous components of the new deal that can be broken into two camps: revenue and non-revenue features and arrangements.
Trending on Billboard
As for revenue, there will be more of it under the new deal — although none of the executives shared specific deal points such as advertising revenue sharing rates. Nash said that “revenue under this new deal does markedly improve over our last deal.” The previous deal amounted to about 1% of UMG’s annual revenues, which works out to about $120 million euros based on 2023 revenue. That’s not much for a platform that commands an average of 58 minutes per day in the U.S., according to eMarketer — almost as much as Netflix and more than YouTube.
But UMG is getting more value out of TikTok in forms other than royalties. Many of those non-revenue components typically cost money to labels: e-commerce tools, marketing and promotion campaigns and ad credits. Other aspects of the deal have value that’s hard to pin down: data, artist insights, intelligence and new programs and new collaboration opportunities.
One interesting aspect of the new deal is what Nash called “content management and attribution.” When TikTok users post videos with sped-up and slowed-down recordings, attribution for the UMG recording is credited “not [to] some infringing third party, but the artists,” said Nash. “And that content is better connected with their official presence on the platform.”
As Grainge outlined in an internal memo to staff on Thursday, the deal also met the two non-revenue criteria: protection against the harmful effects of AI and prioritizing online safety for both TikTok users and UMG’s artists.
TikTok made “a number of commitments” that respect UMG artists’ works and rights of publicity and supports UMG’s principles on training AI models without consent from rights holders. UMG wants to protect its artists against deepfakes such as “Heart on My Sleeve” by Ghostwriter, which used AI-generated soundalikes of Drake and Kendrick Lamar (both UMG artists). The new deal ensures such fake content will be removed, both Grainge and Nash said.
Nash also described these efforts to combat infringing content as “elevated requirements” that detect and avoid infringing content,” including leaks, unauthorized remixes and unauthorized AI versions. The deal also contains requirements for improved filtering and stream manipulation detection.
In addition, TikTok agreed to improve online safety and attempt to mitigate the harmful effects of social media, including hate speech, bullying, responsible use of AI, and addressing infringing content and algorithmic manipulation, Grainge wrote in his memo.
Social media income might not amount to much today, but it “is increasingly important income to artists, songwriters, labels and publishers,” said Grainge during Thursday’s earnings call, “which is why we’ve pushed so hard and we will continue to push to protect and to develop it.”
Helped by paid music subscriptions and a strong performance from its music publishing division, Universal Music Group generated revenue of 2.59 billion euros ($2.8 billion) in the first quarter of 2024, a 5.8% increase (7.9% at constant currency) over the prior-year quarter, the company announced Thursday (May 2).
Explore
Explore
See latest videos, charts and news
See latest videos, charts and news
Notably, UMG’s margins improved from a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) improved 13.2% to 591 million euros ($640 million). As a percent of revenue, adjusted EBITDA margin was 22.8%, up 1.5 percentage points from 21.3% from the first quarter of 2023.
CFO Boyd Muir attributed the margin improvement to revenue growth and a change in product mix — namely, less physical sales — but during Thursday’s earnings call he cautioned “not to read too much into any one quarter” and urged investors to look at trends over longer periods.
Trending on Billboard
The quarterly earnings release arrived a day after UMG announced a new licensing deal with TikTok. Analysts probed for insights into the economics of the agreement and possible impacts to UMG’s financial statements. Executives declined to provide details about the deal but insisted it provides fair value relative to other short-form video platforms.
Michael Nash, UMG’s executive vp/chief digital officer, said the new TikTok deal is “a substantial improvement” from the previous one and the revenue “does markedly improve for our last deal.” Some of the deal’s value is difficult to quantify, however. Nash added the new agreement contains “aspects of economic value” — such as ad credits, data and marketing programs — that won’t show up in future financial statements.
Each of the company’s divisions — recorded music, music publishing and merchandise — showed improvements in the first quarter. “This broad-based growth continues to underpin our confidence about the longer-term health of our business,” said Muir.
Subscription services were a main driving force in UMG’s quarter. Recorded-music subscription revenue grew 10.7% to 1.12 billion euros ($1.2 billion) and accounted for 43.3% of total company revenue, up from 41.4% in the fourth quarter of 2023. Recent price increases by Spotify, Apple Music and Amazon Music weren’t the only — or the primary — factor. “Subscriber growth is the biggest driver of the year-over-year growth rates we see at UMG,” said Muir.
Total streaming revenue grew at a slower rate, however, gaining 8.9% to 343 million euros ($371 million). Speaking about ad-supported streaming, Muir said he is “encouraged” by improvements but “cautious” about growth “until we see a consistent broad-based improvement across all partners and across all geographies and probably over a more consistent, longer-term timeframe.”
Total recorded-music revenues grew just 3.4% to 1.99 billion euros ($2.15 billion). Top sellers in the quarter came from Taylor Swift, Noah Kahan, Morgan Wallen, Ariana Grande and Olivia Rodrigo. Physical revenue in the recorded-music segment dropped 18.5% to 255 million euros ($276 million). (Taylor Swift’s The Tortured Poets Society, which sold 859,000 vinyl copies in its first week of release, will impact UMG’s second quarter results.) Muir explained the decrease in physical sales stemmed from particular strong physical sales in Japan in the prior-year quarter. Licensing and other revenue fell 1.8% to 222 million euros ($240 million).
Music publishing revenue jumped 16.7% to 496 million euros ($537 million) thanks to digital revenue’s 22.9% increase to 284 million euros ($307 million). Performance revenue’s 26.7% increase to 114 million euros ($123 million) more than compensated for synch revenue’s decline of 10.1% to 62 million euros ($67 million)
Merchandising revenue grew 6.5% (7.5% at constant currency) to 114 million euros ($123 million). Touring merchandise sales increased while direct-to-consumer sales and retail sales declined.
The company remains on track to realize 75 million euros ($80 million) in cost savings in 2024, said Muir. In February, the company announced a plan to save $270 million annually through organization redesign and layoffs. As part of the redesign, UMG created label operations on the coasts under the leadership of two top executives. On the East Coast, Republic Corps is led by Republic Records co-founder Monte Lipman. On the West Coast, Interscope Capital Labels Group is helmed by John Janick, previously the chairman/CEO of Interscope Geffen A&M.
HipHopWired Featured Video
Source: VALERIE MACON / Getty / TikTiok / Universal Music Group
TikTok is currently on the government’s clock following the passing of a bill threatening the platform’s banning if its parent Chinese-owned company, ByteDance, doesn’t divest from it. Still, at least the platform no longer has to worry about not having music to provide to users for their dance videos.
Spotted on The Verge, TikTok and Universal Media Group agreed on a “multi-dimensional” deal that will see the return of music from artists like Drake, Taylor Swift, JAY-Z, Olivia Rodrigo, and others on the popular social media platform.
This new deal between the two giant entities comes after UMG began pulling music off TikTok, with its 1 billion users, including celebrities like Dwayne “The Rock” Johnson, noticed TikTok took down video posts featuring music.
The agreement will address a primary concern for artists and UMG regarding the use of generative AI. “TikTok and UMG will work together to ensure AI development across the music industry will protect human artistry and the economics that flow to those artists and songwriters,” a press release announcing the deal reads.
Speaking on the new agreement, Ole Obermann, TikTok’s Global Head of Music Business Development, said, “We are delighted to welcome UMG and UMPG back to TikTok. In particular, we will work together to make sure that AI tools are developed responsibly to enable a new era of musical creativity and fan engagement while protecting human creativity.”
As part of the new agreement, there will also be “new monetization opportunities,” and TikTok is working quickly to get the music back on its platform.
We’re happy TikTok users will have a great selection of music to add to their conspiracy videos again.
Universal Music Group chairman/CEO Lucian Grainge penned a memo to staff, obtained by Billboard, about the music company’s new licensing agreement with TikTok that ended a three-month standoff between the two entities, saying the deal ended with “a decidedly positive outcome,” with TikTok agreeing “to key changes in several critical areas.”
The announcement of the new deal, which came after a high-profile dispute between the world’s largest music company and one of the current premier social media platforms in the world that first erupted in late January, was announced early this morning (May 2). The agreement will see UMG’s millions of compositions and songs, both from its recorded divisions and its publishing company, return to the platform “in due course.” The feud has been one of the biggest talking points in the music business for the better part of this year, with artists and songwriters caught in the middle of the corporate standoff and looking for alternate ways to promote and market their music beyond the parameters of TikTok.
In his memo today, Grainge broke down some of the particulars of the new agreement, saying that UMG was able to get TikTok to address its major concerns. “This agreement marks another significant step we’ve taken to guide the industry’s evolution towards a future where human artistry must be respected, artists and songwriters are treated fairly, and their fans are provided with platforms that better prioritize safety and integrity,” Grainge wrote.
Trending on Billboard
During the dispute, many in the industry were split about the issue and its effects on artists and songwriters, particularly those without much leverage or who were trying to build a following. Many music companies and organizations came out in support of UMG, saying that its fight for better remuneration and protections in an AI age was an important one for the industry as a whole, and dozens of artists also signed an open letter stressing the importance of protections against AI infringement and other issues. At the same time, many artists and songwriters — both developing artists that relied on TikTok to build a following, and some of the bigger names in the music business — decried the ban as having a negative effect on the industry, and some of the biggest artists in the world, including several with UMG connections, found ways around the ban and were able to continue to benefit from their music being on the app while the dispute dragged on.
Grainge acknowledged that friction in his memo today. “As an organization committed to breaking new ground, driving the industry forward, and protecting artists and songwriters from the negative effects of disruptive technology, we expect and even embrace the inevitable conflicts that will result from fulfilling our commitments,” he wrote. “But ultimately, the point of engaging in such conflicts is to find higher common ground from which progress can be made.”
As part of the agreement, Grainge referred back to the open letter that UMG penned in January when negotiations first collapsed, wherein the company outlined three issues it could not come to terms with TikTok on: fair compensation for artists, protection from AI, and safety for its artists. On the compensation issue, Grainge says the new deal improves compensation for artists and songwriters and that the “total value” from the partnership “will be more closely aligned with other platforms in the social music category,” referencing the amount of advertising money that social companies bring in even for content they host for free. He also wrote that TikTok will be working to improve its content identification moderation, and “implement tools and processes to help address provenance and attribution issues, helping artists and songwriters to more effectively monetize their work.”
On the AI issue, Grainge wrote that the platform “addressed the primary concern we expressed in our open letter that AI generated content would ‘massively dilute the royalty pool for human artists,’” and committed to respecting artists’ right of publicity to own their voices and to support training AI models on licensed content, rather than without artists’ or rights owners’ consent. That means the ability to take down “fake artist” AI content uploaded by third parties, among other protections.
In terms of safety for users and artists on the platform, Grainge wrote that the platform “agreed to take steps to address our concerns around platform integrity and the negative impact of social media on its users.” Some of those steps he outlined included “policies and tools to prevent and remediate hate speech and bullying,” as well as addressing deepfakes, infringing content and “algorithmic manipulation” on TikTok.
“I want to express my deep gratitude to all of UMG’s artists and songwriters who, over the last few months, have had to endure having their music removed from TikTok during the dispute,” Grainge ended on. “We appreciate how difficult this may have been for some of them and we are so grateful for their willingness to pursue the path we took. I have no doubt that their advocacy — both publicly and behind the scenes — will positively influence the future of the industry for all artists.”
Read Grainge’s full memo below.
Dear Colleagues:
I’m very pleased to share the good news that our dispute with TikTok has ended with a decidedly positive outcome: they have agreed to key changes in several critical areas (including artificial intelligence, platform safety, remuneration) and we will once again license our music to them.
This agreement marks another significant step we’ve taken to guide the industry’s evolution towards a future where human artistry must be respected, artists and songwriters are treated fairly, and their fans are provided with platforms that better prioritize safety and integrity.
I want to express how grateful we are for the outpouring of support from so many corners of the global music community over the last several months. Artist rights organizations, independent labels, music publishers, music advocacy groups and of course so many individual artists and songwriters were outspoken in their support, recognizing the importance of what we were seeking to achieve. United in purpose, they strengthened our resolve to fight for the result we have achieved: a deal that will benefit not only UMG artists and songwriters but the entire music ecosystem.
As an organization committed to breaking new ground, driving the industry forward, and protecting artists and songwriters from the negative effects of disruptive technology, we expect and even embrace the inevitable conflicts that will result from fulfilling our commitments. But ultimately, the point of engaging in such conflicts is to find higher common ground from which progress can be made. I am enormously proud of what our teams and our artists have been able to achieve with TikTok in finding that common ground on which we will build a foundation for a brighter future.
Three months ago, on January 30, we issued an open letter to the artist and songwriter community that stated plainly that any new deal with TikTok would have to address three critical issues, including:
Protecting artists and songwriters from the harmful effects of AI, and dilution of royalties by a flood of AI content;
Improving the compensation paid to artists and songwriters; and
Prioritizing online safety for both TikTok’s users and our artists.
To convey to you the essence of what we’ve accomplished, I’ll highlight the gains we’ve achieved on all three issues within the context of why these issues have been so important for UMG and all of us as a community.
I. Protecting Human Artists from the Harmful Effects of AI
TikTok has now addressed the primary concern we expressed in our open letter that AI generated content would “massively dilute the royalty pool for human artists.” Further, they have made a number of commitments regarding AI that demonstrate respect for our artists’ and songwriters’ works and “rights of publicity,” as well as support of UMG’s principles on AI, including on training without consent.
AI technology, when used responsibly, offers artists enormous untapped potential, but when used irresponsibly, threatens to cause them deep harm. UMG has been leading the industry in addressing AI’s potentially harmful effects while embracing its opportunities. Our Responsible AI initiative, which was launched last year, puts the protection of artists and the advancement of their interests at the very core of how we think about AI. The goals of that initiative are:
·protecting human artists from being economically disadvantaged by AI;
·guarding against the use of AI-generated deepfakes; and
·requiring transparency in how AI companies train their models.
Our new agreement with TikTok will protect the integrity and value of human artistry and ensure that “fake artist” AI content uploaded by third parties that misappropriates the identities of our artists and infringes upon their right of publicity can be removed. This new deal will extend artist protections even further and promote a better environment for authentic artist/fan engagement.
The deal is only the most recent example of how we are advancing our AI initiative. Over the last year, with artists, as always, at the forefront of our strategy, we developed relationships with a wide array of leading tech companies and entrepreneurs and have been collaborating with a growing number of them on various market-led opportunities and approaches for the responsible use of AI.
II. Improving Compensation for Artists and Songwriters
Under the new agreement, artist and songwriter compensation will be greater than under our prior TikTok deal, and the total value UMG’s artists and songwriters garner from this partnership will be more closely aligned with other platforms in the social music category. Further, TikTok will implement tools and processes to help address provenance and attribution issues, helping artists and songwriters to more effectively monetize their work.
As technology evolves and allows fans to enjoy and consume music in new ways and from new sources, the health and vitality of the music industry requires that artists and songwriters be fairly compensated from the revenue generated by those new sources. Social media is a critical category for advancement of this objective.
In 2017, as the growth of social media was transforming culture, UMG and Facebook entered into the first-ever deal to monetize what had yet to be monetized—the use of music on social platforms. Since that first Facebook deal, the continued growth of social media and its free-to-consumer music engagement has been remarkable.
In fact, the revenue streams from this social music engagement generate tens of billions of dollars in advertising revenue for digital platforms. (And that consumer engagement also greatly benefits platforms in another way—it enables them to acquire customers for their other business ventures, such as eCommerce.) Given the vast sums that music generates for these platforms, any claim that the “free promotion” they provide would ever be sufficient and fair compensation for the use of that music would be absurd.
Revenue streams from several categories that are “free to the consumer” today (such as ad-supported streaming, synch and neighboring rights) account for more than 30% of all revenue for the entire global recorded music industry—almost double what it was a decade ago. For some artists, that can translate into anywhere from 20% to 40% of their income from recordings.
With the commercial significance of this sector in mind, during the last few months, we’ve accelerated engagement with music on other monetized social platforms including Snapchat, Instagram and YouTube Shorts. And, in a recent agreement with Spotify—which will make available a range of new features that were previously found only on social media platforms—we’ve even broadened the very definition of the social music category. In short, the income from social media is increasingly important income to artists, songwriters, labels and publishers, which is why we have pushed hard—and will continue to push hard—to protect and develop it.
III. Providing Online Safety for TikTok’s Users and Artists
Under our new deal, TikTok have agreed to take steps to address our concerns around platform integrity and the negative impact of social media on its users.
The harmful consequences of unmonitored social media have been highly publicized of late. It is a critical part of our mission to work toward promoting the safety and integrity of environments for our artists and their fans.
Some of the concerns on our agenda with TikTok will include safeguards such as policies and tools to prevent and remediate hate speech and bullying. Some of the platform integrity measures include important steps to help address deep-fakes, infringing and unauthorized content and algorithmic manipulation.
I want to close by saying something more about the unprecedented support we received from the music community, especially those individual artists and songwriters who raised their voices in various forums. Of special note are those who signed the recent Artist Rights Alliance open letter which called on tech platforms to employ AI in a responsible manner and not at the expense of recording artists and songwriters. Their widespread support underscored the importance of striking AI protections. In particular, I want to express my deep gratitude to all of UMG’s artists and songwriters who, over the last few months, have had to endure having their music removed from TikTok during the dispute. We appreciate how difficult this may have been for some of them and we are so grateful for their willingness to pursue the path we took. I have no doubt that their advocacy—both publicly and behind the scenes—will positively influence the future of the industry for all artists.
Thank you to all who helped make this possible. This is yet another example of what the music community can accomplish when we work together.
Lucian
Fonovisa-Disa, Universal Music Group‘s regional Mexican label, has appointed Ana Martinez to U.S. GM. Based in Los Angeles, Martinez, a 19-year music industry veteran, will report directly to Antonio Silva, MD of Fonovisa-Disa for the United States and Mexico.
“The legacy that Fonovisa has historically created, mainly across Mexican music, has been the inspiration and reference for entire generations, and will continue to build long into the future,” Martinez said in a statement. “With the current moment in Latin music, it is exciting for me to join a company and team of this nature, to herald a new era for this historic label, where our music continues to elevate, leaving its mark on history and culture, not only across Latin music, but also globally.”
Martinez previously spearheaded strategy and relations as part of Amazon Music’s global Latin team, where she carried out global campaigns for the likes of Bad Bunny, Karol G and Shakira, as well as multi-platform Amazon livestreams, including Maluma‘s concert from Medellín in 2022, ”Medallo En El Mapa.” Prior to Amazon, she spent seven years at Universal Music México, joining the company as label manager of Anglo repertoire before landing the role of marketing director.
Trending on Billboard
“I am very excited about the integration of Ana Martínez to the team, her experience across different fields of the industry complements our business vision and strategy for the Fonovisa-Disa roster,” added Silva. “I fully trust that her ability to foster success across projects will further strengthen our vision of generating global hits for Mexican music in the future.”
Martinez’s appointment comes just months after Alfredo Delgadillo was appointed as president/CEO of Universal Music México. Of Martinez’s return to Universal Music Group, Delgadillo said: “Ana is always connected and thinking ahead of the market and this, together with her extensive experience across the Latin music industry from independent labels, booking and production of concerts, artist management, her time in specialized magazines and most recently in her position at Amazon Music, will further nourish our ecosystem and help Fonovisa-Disa to maintain its position as the leader of Mexican music in the world.”
On Jan. 30, the day before Universal Music’s deal with TikTok lapsed, the company announced in an open letter that “we must call time out on TikTok,” for not paying rightsholders and creators enough. Universal immediately began removing its recordings from the platform — then, by the end of February, took down every composition to which it had some rights. Essentially, Universal went to war for the value of music, to benefit not only it and its artists and songwriters, it said, but the entire industry. And although the two other major labels declined to comment at the time, Primary Wave, Downtown and Hipgnosis publicly backed Universal, and in late March Sony Music CEO Rob Stringer told the Financial Times that he did not rule out taking the same action as Universal.
Not Taylor Swift, though.
Trending on Billboard
By April 11, a little over a week before the release of Swift’s new album —The Tortured Poets Department, which comes out April 19 — songs from Swift’s albums to which she owns the rights were available on TikTok. Which made for an uncomfortable conversation, you’d have to imagine — and that’s about all you can do, because neither Universal nor Swift’s representative would comment and TikTok could not be reached for comment.
It seems that Swift’s contract with Universal allows her to either license the recordings she owns herself or somehow opt out of label licensing policies, which is an unusual amount of independence. Usually acts with that kind of leverage choose to leave their music off of new services — the Beatles waiting to offer their music on the iTunes Store is the classic example — or strike some kind of exclusive deal, like Garth Brooks did with Amazon Music. It’s hard to think of another example where a label announced it was going one way and its biggest artist — although she hasn’t said anything about her decision — went another.
That’s a big deal. Eventually, Universal’s other megastars — think Morgan Wallen, Drake, or The Weeknd — might want that same freedom or start to think about using whatever freedom they already have. Some artists have more power than others, though: Swift’s contract is generally thought to be more like a distribution deal, where she owns her new recordings, including the Taylor’s Versions of her old albums, but licenses them to Universal. Also, with 18.9 million album consumption units in 2023, more than some divisions of major labels, she has more market power than any other artist.
Given TikTok’s relatively low payouts, many executives assume that Swift appreciates the platform’s promotional value, even though she doesn’t exactly need it — Tortured Poets would almost certainly be the biggest album of the year either way. There’s also speculation that she wants to reach out to younger fans with shorter attention spans.
This reasoning seems to go against Swift’s reputation for sticking up for the value of music more broadly, as she did when she declined to release her 1989 album on Spotify, pushed Apple Music to pay rightsholders for plays during the service’s free trial period and insisted that Universal pay artists their share of the proceeds from its Spotify stock sales whether their deals had recouped or not. “This is not about me,” she wrote about the Apple situation at the time, but rather about emerging artists. What happens to them now? It has even been suggested that Swift essentially crossed a picket line of sorts.
That’s a bit much. The concept of a picket line implies a situation in which people who are paid on a scale are bargaining collectively, and that’s not the case here. And it’s not Swift’s responsibility to fight for the overall health of the music business — she’s an artist and she’s already done far more than most. For that matter, there’s more to creators’ rights than the size of a check. If you think about the way Swift re-recorded her old albums, she may place as much value on control — not only how much she makes on an album, but who owns it, how they present it, and where and under what circumstances it can be heard. I’m not sure whether her decision about making her music available on TikTok is the right one, but I am completely positive that it’s not mine to make.
This is all based on the assumption that Swift’s agreement with TikTok is vaguely similar to the one labels have, but that may not be the case. If you think about Swift’s instinct for navigating the music business, her deal could be much better — perhaps with an advance or guaranteed minimum or other kinds of considerations. (Just to be clear, I have no idea.) If you were, or managed, an artist with that kind of market share, what would you ask for? And if you worked for TikTok, facing political pressure in the U.S., as well as a difficult negotiation with the biggest music company in the world, how much would you be willing to offer?
In the modern media business, market share doesn’t just create efficiency — it also offers important negotiating leverage, especially with technology companies that operate on a global scale. That’s why music and film companies are buying rivals, getting deeper into the distribution business, and pursuing growth so aggressively in the first place. Swift may be the only artist there is who can offer real scale by herself, built on recordings she owns herself, so labels don’t need to worry about this becoming a trend. But whatever Swift’s decision means for the industry at large, it seems somewhat inevitable that she would pursue, and at some point use, the power her market share gives her — just as the major labels do.
When licensing negotiations between TikTok and the Universal Music Group collapsed at the end of January, many official recordings from UMG artists vanished from the platform. UMG chief digital officer/executive vp Michael Nash told financial analysts in February that the company had been “providing notices to effectuate the muting of millions of videos every day for the last two weeks.” Yet a number of songs connected to UMG — or its publishing wing, Universal Music Publishing Group — remain available on TikTok anyway.
Some are user uploads, which might theoretically be harder to find and take down or mute. Others are official tracks, including recent releases from prominent stars and fast-moving viral hits. And much of Taylor Swift’s catalog returned to TikTok on Thursday (April 11), raising the question of how other artists may be able to find workarounds while the licensing dispute continues.
Trending on Billboard
One possible reason that some songs are staying on TikTok: Several artist lawyers tell Billboard they are devising contractual carve-outs to allow their clients to keep their music on the platform. Others note that even though they haven’t added these clauses to recording agreements yet, it has become a topic of conversation with their clients.
“Some labels are allowing some of their artists to exclude newly created music from the grant of rights until the label has a deal in place” with TikTok, says David Fritz, founding partner at Boyarski Fritz. “Because the issue is so new, we are developing on the fly to meet the needs of talent — songwriters and artists — that want their music on TikTok. This is an issue, and workaround, that came about solely as a result of UMG taking down its catalog from TikTok.”
Reps for UMG and TikTok declined to comment.
Some artists have invested years of their life building a following on TikTok. (Predecessor Musical.ly was acquired by Bytedance in 2017 and then relaunched in the United States as TikTok the year after.) For more than two months now, they’ve been unable to share official recordings with those fans on the platform — the same fans who may have earned them their major-label deal in the first place.
“Some artists are concerned about this,” says Josh Binder, founding partner at Rothenberg Mohr & Binder. “They don’t want to be uncompetitive, unable to use TikTok to muster up an audience.”
“TikTok is mostly used as a new-music discovery tool — discover a clip on TikTok, listen to it on a DSP,” Fritz adds. “So those who are trying to get their music discovered are the most concerned” about being unable to promote new songs on the app.
In 2022, MIDiA Research found that TikTok was the second-biggest driver of music discovery for Gen Z, after YouTube. In recent months, TikTok popularity has helped little-known acts like Dasha, Good Neighbours and the Red Clay Strays explode at streaming services — leading to major-label deals — and contributed to breakout hits for Djo, Flo Milli and Benson Boone, among others.
UMG pushed back against the idea that TikTok has a lock on discovery during its most recent earnings call. Chairman/CEO Lucian Grainge told financial analysts that TikTok was “not a material part of the multidisciplinary jigsaw where we promote and market our music globally.” And UMG CFO/executive vp Boyd Muir said that UMG would “focus on accelerating [its] partnerships” with other social media platforms, including Meta, Snap and YouTube, to provide alternative promotional avenues for its artists.
But the job of an artist lawyer — a good one, at least — is to help their client get what they want. Labels typically aim to control as many rights as they can for as long as they can. In the modern music business, artists have more ability to push back; because they can generate momentum on their own, without a record company’s help, more aspects of a record deal are negotiable. “You can cherry-pick what you want to be in your contract to some degree,” Scott Booker, the longtime manager of The Flaming Lips, recently told Billboard.
As with any negotiation, artists’ ability to get their preferred terms comes down to their leverage — for stars especially, there are few rules that can’t be bent — and the skill of the lawyers involved. “If you successfully reserve the right to license to TikTok directly in your contract with UMG, you would be able to do so directly or via a third-party service,” says Leon Morabia, a partner at Mark Music & Media Law. “It would be a difficult point to win in a deal, but it is contractually feasible.”
Josh Love, partner at Reed Smith, says he has been able to get “a carve-out” in the past that allowed an artist “to do a direct license with a DSP” — a digital service provider like TikTok or another social media or streaming service — “if the label or distributor is ever not licensed with that DSP and [the artist] wants to remain on the platform.” This is meant to act as interim coverage for an artist; if the label or distributor were to form a new licensing agreement, that would likely supersede that deal made between the artist and the DSP in the meantime.
Some clauses that are already in record deals could also be expanded by artist attorneys to ensure their clients’ music remains available on TikTok. “Release commitments,” for example, are put in place to “force the label to guarantee that a record will be released within certain months after delivery so that the artist’s record doesn’t get ’shelved,’ with the artist stuck in the deal,” says Gandhar Savur, a music attorney.
These clauses have become increasingly comprehensive, stretching “to cover commitments by the label over more specific aspects of the release — the exact countries in which the album will be distributed, formats that the album will be released in such as vinyl and digital, and even including specific major DSPs by name like Spotify and Apple Music.” After negotiations between UMG and TikTok unraveled, Savur continues, “it would be a natural response that artist attorneys will gradually start to require release commitments to cover all platforms generally so that if a label is not licensed with a particular platform for any reason, the artist can deal with that platform directly.”
Savur believes that artists who are signed to labels that are distributed by UMG, rather than signed directly, probably have more latitude to try to deal with platforms like TikTok on their own. “Although I believe that what Universal is doing overall is a good thing for the industry, Universal-distributed labels might be more sympathetic to their artists’ desire to stay on TikTok because the increased streaming and ticket sales [that] result from any tracks going viral on the platform can be a big win for the artist and label alike,” Savur says.
If the UMG-TikTok deadlock rolls on, Fritz says, “smart lawyers” with leverage will find “a workaround that enables their clients to continue to use the most popular discovery tool while the large-scale license gets worked out.”
Much of Taylor Swift‘s discography is back on TikTok on Thursday (April 11), returning a little over a week before the anticipated release of her new album, The Tortured Poets Department, due out April 19.
Official audio for hits like “All Too Well (10 Minute Version) (Taylor’s Version),” “Cruel Summer” and “Style (Taylor’s Version)” are among the songs now available for users to make videos with on the short-form app. It appears that there are no official audio for Swift’s songs released before her album Lover, meaning the original recordings from Fearless, Speak Now and Red — recorded for the Big Machine record label — are not available, though her recent re-recordings of those albums are.
Swift’s catalog was pulled from TikTok at the start of February after the parent company for her record label and publisher, Universal Music Group, announced that it was letting its licensing agreement with TikTok lapse, citing that the app was not willing to pay for the “fair value” of music, as well as other concerns like AI and artist safety. That affected songs by many of music’s biggest stars, including Swift, Drake, SZA, Olivia Rodrigo and more, who all have recording and/or publishing contracts with the company.
Trending on Billboard
For Swift, the ownership of her Big Machine catalog has been the subject of much conversation in recent years. Her first six albums — covering her self-titled debut in 2006 through 2017’s Reputation — were sold to Scooter Braun in 2019 after the manager and entrepreneur’s Ithaca Holdings acquired Big Machine in a deal worth more than $300 million.
That sparked a backlash from Swift, who vowed to re-record each of those albums in order to re-release them and own the recordings herself; she has since released “Taylor’s Version” re-recordings of Fearless, Red, Speak Now and 1989. In 2018, Swift signed a deal with UMG to license her future recordings to Republic Records, and has since released four additional albums through that deal, the copyrights to which she also owns. While it’s unclear why her recordings are back on TikTok, it’s notable that the tracks that she owns are the ones that are available.
In a letter to its artists on Jan. 30 explaining the licensing spat, UMG wrote, “With respect to the issue of artist and songwriter compensation, 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 fired back at UMG’s announcement hours later, saying, “It is sad and disappointing that Universal Music Group has put their own greed above the interests of their artists and songwriters.”
In addition to her label deal with Republic Records, Swift has been signed to Universal Music Publishing Group (UMPG) as a songwriter since 2020; previously, she was signed to Sony Music Publishing as a songwriter. Her frequent collaborator, Jack Antonoff, was also signed to Sony Music Publishing until he switched to UMPG in August 2023.
Reps for TikTok, Universal and UMPG did not immediately respond to requests for comment.