Will the 'BTS Challenge' Disappear from TikTok? License Negotiations at Risk of Collapse
Negotiations with Universal Managing BTS and Swift
'Tug of War' Over Content Usage Fee Disagreements
The world's largest music content company, Universal Music Group, and the video-sharing platform TikTok are on the brink of a breakdown in their licensing negotiations. If these talks fail, music by artists such as Taylor Swift and BTS will no longer be available on TikTok.
On the 31st (local time), The Wall Street Journal (WSJ) reported, "Universal Music has indicated that if the license renewal negotiations, which expire today, are not finalized, it will prohibit the use of its artists' works on TikTok." Previously, Universal Music Group signed a contract with TikTok in February 2021, allowing application users to use Universal Music's music clips in their videos.
Universal Music manages content from global pop stars including ▲Taylor Swift ▲Olivia Rodrigo ▲Sam Smith ▲BTS ▲BLACKPINK ▲NewJeans. Because of this, Universal Music is an important partner for TikTok. However, if the license renewal is not completed by today, TikTok will not only be unable to use the songs of artists under Universal in the future but will also have to delete billions of videos containing their music. The deletion of existing videos, such as 'dance challenge videos,' and restrictions on creating new videos are expected to impact TikTok significantly, given the platform's business model where view counts are crucial.
The cause of the potential breakdown in renewal negotiations lies in differences over content usage fees. Universal Music stated, "TikTok is trying to expand its business using popular music content but refuses to pay a fair price," adding, "TikTok offered an amount that is only a fraction of what other social media platforms pay." They further criticized, "TikTok is attempting to run a music-based business without paying the rightful value for music." It is reported that TikTok accounts for about 1% of Universal's revenue.
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In particular, Universal Music is said to be angered by TikTok's coercive behavior during the negotiation process. They claim TikTok deliberately deleted music from emerging artists under Universal Music to pressure negotiations in its favor. However, TikTok denied these allegations as false. In a statement, TikTok said, "Universal Music is trying to sever ties with a powerful platform used by billions," and countered, "Such actions are not a choice for artists and fans."
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