Why did Universal Music leave TikTok (and then come back)?

Universal Music Group

Universal Music Group (“UMG”) is the largest record company in the world with a market share of 31.9% (2022) and revenues of $10 billion (2023). This music powerhouse boasts a roster of iconic artists, from The Beatles and Taylor Swift to Kendrick Lamar and Billie Eilish. 

TikTok, on the other hand, is one of the largest social media platforms in the world, boasting 1.05 billion monthly active users (second only to Facebook, YouTube, WhatsApp, Instagram, and WeChat). It’s the fastest-growing platform of the last five years, valued at more than $250 billion and generating over $110 billion in sales last year.

The Clash and Departure

However, a clash between these titans occurred in January 2024. TikTok’s agreement with UMG terminated, leading to the removal of UMG’s music by the end of February. Renewal talks broke down over issues including artificial intelligence. UMG sought assurances regarding AI-generated music and safeguards against deepfakes, highlighting the evolving legal landscape of music in the digital age.

This wasn’t an isolated incident. In 2008, Warner Music Group pulled out of its YouTube agreement before rejoining nine months later. These disputes showcase the ongoing tension between music rights holders and digital platforms concerning fair compensation and control over creative content.

Consequences of the Standoff

The impact of the UMG-TikTok standoff was significant. UMG argued they received a meager 1% of sales from ByteDance (TikTok’s parent company), with TikTok offering a lump sum instead of a share of revenue. This paled in comparison to payouts from other platforms like Meta and even fitness company Peloton.

For many artists, particularly independent acts who heavily rely on TikTok for promotion, the situation was dire. With UMG music unavailable, some popular TikTok creators saw muted videos and plummeting views, forcing them to shift to other platforms like YouTube. This highlighted the power dynamic between major labels and independent artists, raising concerns about the exploitation of music for corporate gain.

After the pullout, some popular TikTok influencers saw approximately 10% of their content silenced, precipitating a dramatic decline in engagement and prompting a migration towards YouTube’s platform. Nevertheless, it was the independent artists who were hit the hardest since most independent acts relied on TikTok for a large part of their promotion. Some felt that their music was being held hostage for corporate gain.

Resolution and New Agreement

As expected, a few months later, on May 1, 2024, TikTok and UMG announced that they had reached a deal. The components of the new deal can be delineated into two categories: revenue and non-revenue features and arrangements. As for revenue, the parties have not shared specific details such as advertising revenue sharing rates. What has been said is that UMG will be getting more value out of TikTok in the form of other forms of income: e-commerce tools, marketing and promotion campaigns, ad credits, data, artist insights and intelligence, and new programs and collaboration opportunities.

There will also be “content management and attribution” solutions. When TikTok users post videos with sped-up and slowed-down recordings, attribution for the UMG recording will be credited to the artists, instead of any third parties.

EPGD Business Law is located in beautiful Coral Gables. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

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Silvino Diaz

Silvino E. Diaz’s practice ranges from Civil and Commercial Litigation to Entertainment and Intellectual Property Law. Silvino has earned a reputation as one of Puerto Rico’s foremost advocates for independent musicians and artists. As a result of his sustained commitment to creative industries, he was named Professor of Intellectual Property Law at Atlantic University College (Guaynabo, PR) – the Caribbean’s leading digital arts institution – where he spearheaded the “Introduction to IP” course for both the graduate and undergraduate programs, and was appointed by the Office of the President to develop an Intellectual Property graduate curriculum, where he served until moving to Miami in 2017. He is the founder of the service known as Starving Artists, where he offers innovative business and legal counsel for artists and creatives.


*The following comments are not intended to be treated as legal advice. The answer to your question is limited to the basic facts presented. Additional details may heavily alter our assessment and change the answer provided. For a more thorough review of your question please contact our office for a consultation.



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