2024 is starting out with a bang!

Big news just landed that might impact the future of music on social networks.

Universal Music Group decided to pull their entire music catalog (around 3 million tracks) from TikTok. Yes, they’ve pushed “pause” on their relationship with the social media giant.

The move comes after the expiration of their current contract, which officially ended on January 31st, 2024. According to UMG, the two companies couldn’t reach an agreement that fairly compensates rights holders, artists, and songwriters.

TikTok argued in response that Universal is being greedy, suggesting that UMG artists will miss out on the free promotion that has played a significant role in building many modern music careers.

How much is “exposure” worth?

To clarify the basics of TikTok monetization:

TikTok pays money to rights-holders based on a “creation event.”

A creation event occurs when a TikTok user first places a track in their video. This means if a video goes viral and garners millions of views, that usage is still considered a single “creation event.” Payments are not tied to overall consumption. Of course, this benefits TikTok.

TikTok argues that the existing payment system is fair because it provides artists with the opportunity to garner massive exposure through algorithmic discovery.

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Who will this help or hurt?

There are always details we can’t see behind the scenes. But at face value, it feels like this is a positive move for creators.

In a world where musicians are often expected to trade financial compensation for the promise of “exposure,” Universal’s decision to stand firm on their principles of fighting for better pay should be seen as a positive move for all artists, including Indies and emerging artists alike.

Social networks thrive on the creative content provided by rights holders and their fans. And it seems like the time has finally come where they’ll be forced to prioritize fair monetization for the usage of that intellectual property.

But will TikTok really feel the heat?

UMG’s catalog contains some of the most high-value songs in history. So it’s possible TikTok users will put pressure on the platform to negotiate different terms.

On the other hand, it’s possible that in a world of lightning-paced music creation and an endless supply of new trends and trending sounds, users just… pick different tunes.

It’ll be interesting to see how this plays out, and who’ll emerge as the ultimate winner.

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