The European professional association of independent labels, IMPALAtook the side Universal music group in its ongoing dispute with TikTok over music licensing fees on the social media platform.
At the same time, IMPALA also called on streaming services that recently changed their royalty payments to address what it calls the “negative consequences” of those changes, namely: Spotify And Deezeris moving towards an “artist-centric” payment model, and AppleChanges to payments that reward music available in spatial audio.
“There is an urgent need to ensure fair income” from services such as Tic Tacsaid Mark KitcattPresident of IMPALA Streaming Group and CEO of Eternal records And Popstock Distributors.
“With this in mind, IMPALA supports UMGTikTok’s stance on the appropriate valuation of music. The Independent Community has taken a similar approach at different times over the years with other services, from MTV has Apple has Youtube.
“We also reject arguments equating the use of music on TikTok with promotion. There is a huge value gap that needs to be closed but, beyond that, an exciting opportunity to explore new ways of generating and sharing revenue.
In a statement released on Wednesday (April 4), IMPALA said it was “necessary for services like TikTok to work with the independent music community to achieve fair licensing terms.”
TikTok responded via a spokesperson: “We value the relationships and licensing agreements we have with the independent music community across Europe. TikTok has always been a licensed service and we’re proud of the success independent artists and businesses have had through our platform.
“Since the start of the year, we have seen significant global success from artists across diverse genres and countries, from established stars to newbies, and this success continues to grow.”
The dispute between UMG and TikTok exploded in public view in late January, when it emerged that UMG’s catalog of recorded music would disappear from social media by the end of the month, after the two parties had failed to reach an agreement.
One month later, the UMG editorial catalog started to disappear from TikTok as well.
Rhetoric between the two companies has been heated at times, with UMG claiming that “deals with TikTok expired due to TikTok’s refusal to adequately compensate artists and songwriters, protect human artists from harm of AI and solve online safety issues for TikTok users. users.”
For its part, TikTok claimed that “Universal Music Group placed its own greed above the interests of its artists and songwriters… Despite Universal’s false narrative and rhetoric, the fact is that they chose to moving away from the powerful support of a platform with well over a billion users who serve as a free vehicle for promoting and discovering their talents.
In its statement on Wednesday, IMPALA rejected the idea that TikTok should be considered a promotional platform for music.
“It’s a use of music that must be remunerated like any other. The issue of promotion is irrelevant,” said Dan WaiteChairman of the IMPALA Digital Committee and CEO of Best Loud Music.
“We want to see independent labels, rights holders and artists receive fair remuneration for their use, and benefit from conditions just as favorable as those on which the biggest majors renew their licenses. Working together to better compensate labels and artists across the industry is essential. We urge TikTok and other services to respect this principle in all areas.
IMPALA’s support for UMG makes it the latest in a growing series of independent labels and trade associations to support UMG in its clash with TikTok.
In February guest column for MBW, Dr. Richard James Burgesspresident and CEO of American Independent Music Association (A2IM), explained the logic behind his group’s support for UMG.
“Music has played a fundamental role in the creation and popularization of platforms like TikTok (formerly known as Musical.ly), contributing significantly to their growth and user engagement,” Burgess wrote.
“Yet this investment by the music industry has not been rewarded with fair financial returns. In an industry that systematically underpays artists and labels, TikTok’s payment method is particularly disadvantageous.”
He added: “The folly of the music industry lies in sacrificing essential revenue from recorded music for the sake of promotion, visibility or discoverability. »
“It’s a use of music that must be remunerated like any other. The question of promotion is not relevant.”
Dan Waite, IMPALA, Best Noise Music
Yet not everyone in the music industry feels like they’ve been harmed by TikTok; both Warner Music Group (WMG) CEO Robert Kyncl And Believe CEO Denis Ladegaillerie have hinted that they are happy with their licensing deals with TikTok.
However, it’s unclear how these deals compare to what TikTok is offering UMG.
“Negative consequences” of new royalty models
IMPALA’s latest statement also appealed to subscription music streaming services – specifically, Spotify, DeezerAnd Apple Music – to address what the trade group calls “negative consequences” of recent changes to their royalty payment models.
Spotify and Deezer recently changed their payment models to accommodate what UMG CEO Sir Lucian Grainge has dubbed the royalty payment model “artist-centric.”
As part of Deezer’s changes, deployed so far in France, “professional artists” – those who have a minimum of 1,000 streams per month and at least 500 unique listeners – receive what is known as a “double boost” to royalty payments, giving these titles double weighting in royalty calculations. A “double boost” is also applied to tracks by artists actively searched by Deezer users.
“We are seeking urgent solutions to combat revenue manipulation and dilution (but) we must also ensure that the proposals are fair for all, and we hope MerlinThe recent agreement with Deezer will contribute to this objective.
Dario Drastata, IMPALA, RUNDA
So far, UMG, WMG And Merlin are among those who have bought into Deezer’s artist-centric model.
Shortly after, MBW announced the news that Spotify is also moving towards an artist-centric model. According to its new payment model, now in force, a song must have been listened to at least 1000 times in the previous 12 months to count towards an artist’s streams, and a track must also have a certain minimum number of unique listeners.
Although the changes aim to address issues like streaming fraud and low-quality tracks (Spotify and Deezer’s changes were accompanied by increased efforts to withdraw Or penalize low-quality tracks), some in the industry have criticized the new payment model because it risks demonetizing music from new or emerging artists.
“We firmly oppose an unfair ‘reverse Robin Hood’ system which consists of taking compensation from emerging artists and allocating it to the most renowned and established artists,” he believes. said last year.
“Moreover, we believe, based on data, that such a system would reduce diversity and discourage creativity. »
“IMPALA supports UMG’s position on TikTok regarding the appropriate valuation of music… We also reject arguments equating the use of music on TikTok with promotion.”
Mark Kitcatt, IMPALA, Everstanding Records, Popstock Distribuciones
IMPALA also named Apple in its statement, likely a reference to Apple’s recently outlined plan to give extra weight to tracks available in spatial audio when paying royalties.
“This will literally take money away from independent labels and their artists, in favor of the bigger companies out there,” said an anonymous senior executive at an independent record label. say it Financial Times earlier this year.
The independent music sector has “struggled to justify the expense of creating space masters”, the executive added.
Now, IMPALA has also expressed concerns about these new payment models, saying that “adjustments can be made” to these models “to avoid harm.”
“We are seeking urgent solutions to combat revenue manipulation and dilution (but) we also need to ensure that the proposals are fair to all, and we hope that Merlin’s recent agreement with Deezer will contribute to this objective,” he said. declared Dario DrastataPresident of IMPALA and Head of RUNDAan association of independent discographers from the Balkans.
“We believe, for example, that there are simple solutions to threshold issues that can be plugged in and we will continue our constructive discussions with services to explore options. Finding the answers will ensure that services are able to develop more opportunities in key markets and genres as well as in multiple languages.
Created in 2000, Impala represents approximately 6,000 independent music companies operating from European countries.
The association has released a 10-point plan “getting the most out of streaming”, which means increasing the overall revenue stream and ending dilution (e.g. through low quality noisy tracks); rejecting “pay-to-play” programs and “other initiatives recreating elements of payola”; and the promotion of the repertoire and local languages.Music Business Worldwide