This analysis was first published in SvD Näringsliv, in Swedish, on February 29th, 2024. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.
Thousands of videos went silent on TikTok when music giant Universal protested against poor terms. The conflict is now escalating — and the power struggle between tech and music is intensifying sharply.
It is widely accepted that Spotify’s greatest achievement was not its technical innovation. Being able to play all the world’s music at the press of a button was admittedly an impressive feat. But the truly hard part was persuading the record labels to participate.
In an early 2013 interview with The Guardian, CEO Daniel Ek described it this way: “I was literally sleeping outside their offices and coming in week after week, knocking down argument after argument.”
Without the goodwill of the record labels, there would have been no Spotify. A question the music industry is now asking itself is whether the same applies to TikTok.
At the end of January, thousands of videos went silent on TikTok after the licence agreement with the world’s largest music company — Universal Music Group (UMG) — expired. Negotiations broke down after UMG demanded higher payments for its music, which TikTok refused. UMG then simply switched off all its music on the platform. Those who wanted to listen to Taylor Swift or Billie Eilish were met with total silence instead.
The result was somewhat strange: the videos remained but were now completely mute — and therefore considerably less enjoyable to watch.
The situation has become problematic for both TikTok and its content creators. Many of them earn their living through commercial partnerships with brands, being paid to feature them in their content. As many videos fell silent, their popularity dropped sharply, with serious financial consequences for the creators.
Much now points to this dispute becoming substantially larger.
In the music industry, there are, broadly speaking, two kinds of rights. There are the rights attached to the recording of a song — what used to be a physical record, and which is now most often a recorded track on Spotify. These are the rights that UMG has so far removed from TikTok.
The second kind of rights belongs to those who wrote and produced the songs themselves. These are called publishing rights. Every song — as anyone who has watched the Eurovision selection process knows — can also have a long list of songwriters.
On Tuesday, UMG activated what the industry is now calling “the nuclear option.” This means the label is removing music for all songs in which they represent at least one songwriter. Exactly what proportion of all popular music this covers is disputed. Industry experts put the figure at around 80 percent, while TikTok itself claims it is closer to 30 percent.
As more and more music disappears, the pressure on TikTok grows. The dispute challenges the power balance that the music industry has had with TikTok since the platform broke through. Many popular artists — including Lil Nas X, Olivia Rodrigo, and Doja Cat — all broke through significantly with the help of their popularity on TikTok. And the way the service allows users to discover new music is an argument TikTok presses hard.
TikTok wrote in a statement: “It is sad and disappointing that Universal Music Group has put its own greed above the interests of its artists and songwriters. […] 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 vehicle for their talent.”
UMG, for its part, said that TikTok accounted for only 1 percent of their revenues, and added: “Ultimately, TikTok is trying to build a music-based business without paying fair value for the music.”
These are strong words — and do not suggest two parties who are anywhere close to an agreement.
Wise from experience with streaming services, music companies like UMG have a clear picture of how they want to be compensated for their music. In Spotify’s case, negotiations ended with the major labels becoming shareholders in the company. For TikTok — already an established multi-billion-dollar business — that is an unlikely solution.
Something must give, however. And as history has shown, record labels follow each other. If Universal Music Group gets paid more, you can be fairly certain that rivals Warner Music Group and Sony Music will demand the same.
The outcome may be costly — but is likely unavoidable — for TikTok.
