The Scoop: Universal Music Group could stop licensing music to TikTok
Plus: Anheuser-Busch to bring back Clydesdales for Super Bowl ad; Fisher Price releases baby Stanley cups.
Music is a key part of TikTok’s success – indeed, an app known as Musical.ly was absorbed into TikTok to create the app we know today. But if Universal Music Group and TikTok don’t strike a deal by today (January 31), users could see their ability to layer music by artists signed by the world’s biggest music label disappear.
According to a report in the Wall Street Journal, UMG said TikTok proposed to pay artists at a rate that is “a fraction of the rate that similarly situated major social platforms pay” for the use of their music, reducing their cut from the current deal, which expires Jan. 31. Universal also claimed that TikTok tried to play hardball with them by taking down the music of emerging artists on the platform while keeping that of major ones.
TikTok hit back, saying that Universal’s threat to pull music went against the best interests of both artists and fans.
“Despite Universal’s false narrative and rhetoric, the fact is they have chosen to walk away from the powerful support of a platform with well over a billion users that serves as a free promotional and discovery vehicle for their talent,” a TikTok spokesperson said in the Wall Street Journal.
Why it matters: For a platform that’s got billions upon billions of videos layered with licensed music, this is a big issue for TikTok. The video app does have a major influence on what music takes root on social media — which translates into songs in viral TikToks earning bigger streaming numbers. However, according to the Wall Street Journal report, TikTok contributes to just 1% of UMG’s revenue, despite billions of plays.
TikTok’s bold tone in their response to UMG’s claims is also notable. It’s clear that those at TikTok know the influence their platform has. But it’ll be interesting to see if they end up overplaying their hand and a deal falls through. The loss of licensed music on the platform could hurt user experience and lead to a downturn in both active users and reputation.
When you’re running the most popular social media platform around, people are going to pay attention when you’re speaking out. They’re going to take notice if your platform fundamentally changes because it can’t license music anymore. These battles could change the social media game and potentially open the door for other apps to strike. This will be a space worth watching going forward – and could alter your own brand’s TikTok strategy.
Editor’s Top Reads:
- For the upcoming Super Bowl, Anheuser-Busch is leaning into nostalgia. The major brewer is trotting its iconic Clydesdales back out once again for a commercial during the upcoming game on February 11. ABC reported that the commercial will be a hat tip to the brewery’s old commercials with an emphasis on delivering what it promises — a high-quality product. In addition to the prancing horses, the commercial also features real-life Budweiser wholesalers, another nod to authenticity and history over flash and glitz. It’s interesting to see such a major company rely on tradition rather than star power on the biggest advertising stage, but a tactic that could serve as solid counterprogramming during the Big Game.
- Stanley cups — the tumbler mugs, not the hockey trophy, as this writer thought at first — have been incredibly popular lately. Stanley, despite existing for over a century, has shown a knack for listening to emerging audience segments, leading to increased popularity and demand. According to a report in USA Today, that popularity has now carried over to a Fisher-Price lookalike mug for small children who want cups that look just like their parents. While not an official collaboration with Stanley, Fisher-Price is attuned to the trends of the day and acting accordingly. “Are you obsessed with the most buzzed-about tumbler as much as the rest of the internet?” Fisher-Price said in a statement. Brands that stay on top of the cultural zeitgeist are more likely to make waves in the public sphere — and that can help lead to better business.
- Sesame Street’s Elmo put out a post on X checking in on how everyone was doing this week — and some of the responses probably weren’t what the little red monster would have hoped for. Many in the responses replied that things weren’t going so well, citing job losses, mental stresses and the overall not-so-rosy state of the world. Some big companies even got in on the action in the replies, with Dominos Pizza UK saying things were “totally fine” and posting an image of a pizza-making machine on fire. The lesson here — when you’re running a social media account that represents your brand, keep an eye on larger social media trends. You never know when an opportunity might arise to become a part of the conversation of the day, and you might even be able to make a memorable impact on it.
Sean Devlin is an editor at Ragan Communications. In his spare time he enjoys Philly sports, a good pint and ’90s trivia night.
TikTok is this insane app that has been out for a decade and is based on dancing and music. I thought this topic was interesting because according to the Wall Street Journal report, TikTok contributes to just 1% of UMG’s revenue, despite billions of plays. TikTok contributes to just 1% of UMG’s revenue, despite billions of plays. which I think is insane because of the billions of videos layered with licensed music. imagine how much money they would receive having more than 1%