TikTok proposed paying our artists and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay. Today, as an indication of how little TikTok compensates artists and songwriters, despite its massive and growing user base, rapidly rising advertising revenue and increasing reliance on music-based content, TikTok accounts for only about 1% of our total revenue. Ultimately TikTok is trying to build a music-based business, without paying fair value for the music.
Generations Z and Alpha will probably be resilient enough to shake off not having UMG's catalog. This could be a chance for smaller labels and individual artists to innovate and occupy a share of attention they would have been blocked out of. Either way, it's a good reminder that when you're negotiating with someone, factor in what you'll do if one of you decides to go nuclear. UMG will probably be fine after nixing a 1% revenue stream. How TikTok will fare is much less clear.
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