Universal/TikTok Showdown Has Become Key AI Battleground
By Phil Kerpen and Michael DeSantis
Universal has pulled some of the world’s most popular artists including Drake, Bad Bunny, and Taylor Swift from TikTok with the expiration of their last licensing agreement, in the process breaking millions of videos that have now lost their soundtracks.
This dramatic action has turned a business dispute into a major cultural event. The dispute is largely the age-old money fight about royalty rates. TikTok pays a fraction of typical royalties to songwriters and artists. They assert that they offer compensation in the form of “a free promotional and discovery vehicle” – the classic excuse behind using and monetizing other people’s work without paying them.
But the dispute is also about something new – artificial intelligence technology with the ability to create music that can directly compete with human musicians, songwriters and performers.
Universal put it this way:
“On AI, TikTok is allowing the platform to be flooded with AI-generated recordings—as well as developing tools to enable, promote and encourage AI music creation on the platform itself – and then demanding a contractual right which would allow this content to massively dilute the royalty pool for human artists, in a move that is nothing short of sponsoring artist replacement by AI.”
Tik Tok’s senior executives appear to understand the central role music plays in the platform’s popularity, proudly stating publicly that “music is at the heart of the TikTok experience” – and the Universal analysis confirms that the majority of content on TikTok contains music, more than any other major social platform.
Indeed, TikTok’s meteoric rise and global dominance have been largely fueled by American music, a fact their own leadership can’t deny. The platform’s own 2021 Music Report begins with the admission that music is central to the TikTok experience.
If Universal is able to use the leverage of its current blackout to secure a new licensing deal that protects artists from competition with AI-generated music, it could become a template for a voluntary market solution to the issue.
In fact, this could be the second major contract negotiations to successfully tackle thorny AI issues, building on the resolution of the recent Hollywood strikes. The Alliance of Motion Picture Television Producers, which represents films and television studios recently concluded negotiations with both the Writers Guild and SAG-AFTRA, who represents performers, that include historic protections regarding AI.
Market solutions are vastly preferable to politicians and bureaucrats in Washington imposing regulations as contemplated by President Biden’s sweeping executive order and ham-fisted legislative efforts led by Chuck Schumer.
TikTok wants to profit from human-created music-centric content with below-market compensation to creators – and possibly zero compensation to creators who are displaced by AI. They probably thought their size and influence would keep them from paying any price, but Universal, a titan itself, is putting that to the test.
Universal Music Group’s stand against TikTok is not just commendable; it’s a rallying cry for others in power to take similar action. By standing up to TikTok, Universal may well inspire a broader movement to protect the rights and fair compensation of artists and creators. They should stay the course.