Two of the world’s largest music companies–Universal Music Group (UMG) and Spotify–are teaming up to become the hub of music discovery. Over the last five years, TikTok has championed the title, but UMG is seeking another way to promote its artists.
There are several reasons why UMG and Spotify are expanding their “strategic relationship.” Let’s get into it.
UMG’s Battle With TikTok
In early 2024, UMG removed songs from TikTok after a long and fruitless battle with TikTok over royalties. UMG scrubbed recordings it owned, published, or distributed from the video-sharing platform.
TikTok has served as the most influential platform for promoting music in the past five years, and the failure to renew its licensing agreement has left many artists upset.
TikTok Did Not Properly Compensate Artists and Songwriters
“In our contract renewal discussions [with TikTok], we have been pressing them on three critical issues–appropriate compensation for our artists and songwriters, protecting human artists from the harmful effects of AI, and online safety for TikTok’s users…” UMG chairman-CEO Lucian Grainge wrote in an open letter.
Grainge continued: “With respect to the issue of artist and songwriter compensation, TikTok proposed paying our artists and songwriters at a rate that is a fraction of the rate that similarly situated major social platforms pay.”
Popular Music Is No Longer on TikTok
Despite UMG removing most of its music from TikTok–which includes songs from artists like Taylor Swift, Harry Styles, Ice Spice, Elton John, and many others–TikTok has not seen a drop in users.
At the time of writing the open letter TikTok accounts for one percent of UMG’s total revenue. Grainge claims that “TikTok is trying to build a music-based business, without paying fair value for the music.”
TikTok Responses to UMG Pulling Music
“It is sad and disappointing that Universal Music Group has put their own greed above the interests of their artists and songwriters… TikTok has been able to reach ‘artist-first’ agreements with every other label and publisher,” TikTok wrote in response to Grainge.
The open letter continued: “Clearly, Universal’s self-serving actions are not in the best interests of artists, songwriters and fans.”
Artist Are Asking for a Solution
Most artists working with UMG have voiced their frustrations with TikTok muting most of their music due to ongoing issues. Since the video-sharing app has become the main source of promotion for new music, many are asking for a resolution to the problem.
UMG is now hoping that a solution can exist with its new expansive relationship with Spotify.
UMG’s New Deal
The new initiatives will include UMG artists sharing short pre-release teasers and pre-save opportunities on Spotify. The companies also hope to host music videos on the music streaming app in the U.S.
Earlier this month, Spotify launched a video program in beta in 11 overseas countries, including Italy, Germany, the U.K., and the Philippines.
Spotify Becomes the New Music Hub
“So many times in my own experience and for countless others, music videos play a key role in hooking you: taking you from being a listener to leaning in and becoming a fan,” Charlie Hellman, Vice President and Head of Music Product at Spotify, says (via Spotify).
Hellman continued: “They’re an important part of so many artists’ toolkits, and it’s a natural fit for them to live in the same place that more than half a billion people choose to listen to music.”
UMG Explains the New Relationship
In the announcement, UMG describes how the partnership will “further amplify music discovery and social interaction and enhance fan experiences across the platform for UMG’s family of artists and songwriters.”
The collaboration will also make ‘a series of new promotional and social features’ available to fans. These features will help artists drive interaction and generate excitement around new releases.
A Massive Blow to TikTok
While there are no specific details about how UMG and Spotify hope to make the music streaming platform the pioneer of music discovery and engagement, the expansive relationship seems ambitious.
The relationship between the two companies showcases the potential shared benefits, dealing a massive blow to TikTok as the necessity of the video-sharing platform for promoting artists diminishes. UMG and Spotify appear to be gaining the revenue they desire.
One Major Challenge for Spotify
What could pose a challenge for Spotify and UMG is the ‘music discovery’ aspect of TikTok. While the Spotify algorithm is impressive, it often confines users to their ‘music genre hubs,’ rather than assisting them in exploring new music.
UMG and Spotify have announced a new feature aimed at helping fans discover artists and new music. However, the companies have not yet released details about this feature.
A Big Win for Spotify and UMG… But Not Artist
“The forthcoming features will put more power in the hands of artists and their teams to help them authentically express themselves, efficiently promote their work, and better monetize their art,” Spotify co-founder and CEO Daniel Ek said (via Variety).
Spotify could have found another way to tighten its grip on the music industry. As more artists are returning to the app after their four-year-long protest against former President Donald Trump and UMG relying on it to become the hub of music discovery, the future is looking bright for Spotify.
