As opposition grows around the world from independent music organisations furious about TikTok’s decision to cut long-established digital music licensing intermediary Merlin out of licensing negotiations between the social media platform and indie labels and distributors, WIN - the Worldwide Independent Network - which represents the global voice of independent music, has issued a statement condemning TikTok’s actions.
This morning WIN will issue a statement including the views of its members, but provided CMU with exclusive access before publication.
In its statement, WIN says “TikTok is crucial to the music industry, and music is crucial to TikTok”, highlighting a report by Australian trade publication The Music Network on an experiment conducted by TikTok in Australia, where the platform limited access to licensed music to some users.
That experiment, said TMN, yielded a result - but possibly not what TikTok had hoped for. “TikTok’s users bailed when its ‘test’ started”, TMN reported at the time, adding that the test appeared to be “a fact-finding mission to place a value on music”.
With music such an important part of the TikTok user experience - something that TikTok’s Global Head Of Music Ole Obermann has previously confirmed, saying “Music is at the heart of the TikTok experience” - the decision by TikTok to cut Merlin from its negotiations “puts independent labels in an impossible place with their artists”, says Zena White, WIN’s chair.
“It’s a choice between their music being available on the platform or ensuring fair licence terms”, she adds. As the Bytedance-owed platform continues to reach out to independent music companies with what is believed, in most cases, to be a boilerplate ‘no negotiation’ take-it-or-leave-it deal, WIN’s CEO Noemí Planas notes that “Merlin was created by independent music companies to compete at the highest level and ensure they can access the best terms”.
TikTok’s decision to move away from Merlin is, it claims, due to a range of factors, including issues around ‘content legitimacy’ and that music that is “not quality controlled for copyright” is coming from Merlin members. As CMU previously reported, cutting Merlin out of its licensing deals is likely to do little to improve these sorts of issues and may even make things worse.
Beyond TikTok’s “disingenuous” reasons for cutting Merlin out of the equation, TikTok’s decision “poses risks to cultural diversity, market access and fair payment for independents”, continues Planas.
WIN’s position has been echoed by multiple national organisations representing the independent music community. Jong-Gill Shin, Secretary General of the Record Label Industry Association Of Korea adds “LIAK expresses profound concern over the current circumstances” of TikTok’s stance, “which pose a significant risk of fostering discrimination against creative works”.
Jong-Gill adds that LIAK “unequivocally opposes TikTok’s recent attempts that threaten to undermine our efforts to secure equitable terms”.
“TikTok’s unwillingness to negotiate a licensing deal with Merlin is just the latest example of the platform doing whatever it can to avoid compensating artists fairly”, says Richard Burgess, CEO of A2IM, the US indie label trade body.
“Now, more than ever, we need Congress to enact the Protect Working Musicians Act and give musicians, songwriters, independent labels and publishers the ability to negotiate collectively in the marketplace”, he adds.
“Without a collective agreement, small labels may have more difficulty negotiating individually, negatively impacting their visibility and participation on a platform as relevant as TikTok”, adds Felippe Llerena, President of the Associação Brasileira da Música Independente in Brazil. Sharing Planas’ concerns about cultural diversity, Llerena says “TikTok’s decision not to renew the agreement with Merlin could weaken the representation of independent music, which plays a crucial role in promoting cultural and regional diversity”.
With the rise of global consumption platforms such as TikTok, YouTube, Spotify, music is able to spread around the world faster than ever. As music travels faster, and finds new, bigger audiences with less friction than ever, there’s wide concern that this benefits big budget major-label owned tracks at the expense of regional independent music.
This erosion of regional and local cultural output is beginning to see push back at a state level, including France’s implementation of a streaming levy to help preserve a sustainable music industry in the country, while Canada’s recent Online Streaming Act saw national broadcasting regulator CRTC propose a similar levy, with proceeds going to support independent artists and labels, including Indigenous music and audio content.
When the streaming levy was introduced in France, Spotify threw a tantrum, threatening to “disinvest” in the country, while DiMA, the trade body that represents streaming services, has launched a letter writing campaign urging Canadian consumers to write to their MPs asking them to oppose the levy in the Canadian Parliament.
“It is extremely detrimental for the independent sector in Latin America that TikTok is applying this pressure to bypass Merlin,” says Francisca Sandoval, President of Asociación Gremial Industria Musical Independiente de Chile. “The very purpose of Merlin is to ensure fairer and more equitable representation for all, especially in regions like ours, and we stand by it. The most affected will be the smaller players, who will have few options, and our biggest fear is that they will end up facing the worst conditions”.
Gord Dimitrieff, Chair Of Government Relations at CIMA, Canada’s indie music trade body agrees, saying “platforms create a significant power imbalance” then they “bypass local regulations and enforce unfavourable terms on rightsholders”. As a result, this “stifles competition, reduces cultural diversity, and limits consumer choice”, he adds.
TikTok’s decision “should act as a wake-up call to Canadian policy makers and politicians engaged in regulating the tech sector”, continues CIMA’s President, Andrew Cash, a sentiment reflected by WIN. Calling on regulators to act, Planas says “We urge policymakers around the world to regulate the tech sector to ensure a truly competitive market where creators' rights are protected from abusive and monopolistic behaviour”.
Pan-European trade body IMPALA has long had concerns about the potential negative impacts of global consumption platforms on diversity. The organisation raised concerns about the question of value within “moment economy” services like TikTok back in April, highlighting the “need for services like TikTok to collaborate with the independent music community to achieve fair licensing terms”
That call is reiterated today by Dario Drastata, IMPALA’s Chair, who is also Chair of RUNDA, which represents indie labels in the Balkans. “We believe giving labels the option to work under a collective deal is the best way for TikTok to achieve these aims and work with artists and genres from across Europe”, says Drastata. IMPALA’s Helen Smith adds, “the growth of the independent sector across all platforms is fundamental to provide fans and consumers with choice and diversity, exactly what TikTok stands for. The easiest way to achieve that is through Merlin".
However, with a 25 Oct deadline looming for independent music companies to “review and sign” a new direct licensing agreement with TikTok if they want their content to remain on the platform, TikTok has offered no comment on whether it intends to reconsider its stance.
That deadline is a “very, very short runway for labels” says Dylan Pellett, General Manager at Independent Music New Zealand. “This would be hilarious, if it wasn’t so disrespectful”, he goes on, adding that it “further demonstrates that TikTok’s behaviour completely undermines their previously stated support of worldwide independent rightsholders”.
Despite widespread criticism of TikTok’s decision, it’s clear that the independent label community is still more than open to striking a new deal with TikTok, so long as Merlin is involved in that negotiation.
“We respect freedom of choice in entrepreneurship”, says Smith. “We invite TikTok to see the value of a renewed collective deal through Merlin and collaborate on growing this important part of the ecosystem. We hope that efficiency and choice for TikTok users, as well as access for artists and labels whatever their country or genre or level of success, and of course joint and standardised efforts on fraud, will prevail and look forward to growing this vital part of the ecosystem”.
