Universal Music Group (UMG) (UMG.AS) will stop licensing its content to TikTok and TikTok Music services, after the music label announced on Tuesday that its contract with the social media platform had not been renewed.
UMG has been pressing TikTok for appropriate artist and songwriter compensation in contract renewal discussions, among other things, according to a letter to its artist and songwriter community.
If UMG fails to reach an agreement with TikTok, all of its songs will be removed from the platform when the contract expires on Wednesday, according to a UMG spokesperson.
In its letter, UMG accused TikTok of “trying to build a music-based business, without paying fair value for the music.”
According to UMG, TikTok proposed paying artists and songwriters a “fraction of the rate” paid by similarly situated major social platforms.
Tiktok told Reuters that UMG’s narrative was “false” and that the company’s actions were not in the best interests of artists, songwriters, or fans.
TikTok generates only about 1% of UMG’s total revenue, according to the music label.
In February 2021, the company signed a deal with social media platform TikTok, allowing app users to incorporate clips from UMG’s music catalog into their videos.