With today the deadline for independent labels to sign a take-it-or-leave-it direct licensing deal with TikTok, the pan-European organisation for the independent music community, IMPALA, has published an open letter urging the social media company to restart “good faith negotiations” with Merlin. It also says indie label music should be allowed to stay on TikTok under the old Merlin deal while that happens.
Referencing previous statements TikTok has made about valuing its relationships with the independent music community, IMPALA states, “we believe the best way to build a strong and cooperative partnership with our community is to respect independent labels’ and distributors’ choice to license via Merlin”.
TikTok recently walked away from negotiations to renew its licence with Merlin, which negotiates digital licensing deals on behalf of thousands of independent labels and distributors around the world. Instead, TikTok said that Merlin-member labels would have to sign direct deals if they wanted their music to remain in the audio clips library on the short form video platform.
It’s not clear how many indie labels and distributors have done that, though TikTok yesterday put out a statement announcing a new deal with Merlin member United Masters.
TikTok Head of Music Business Development Ole Obermann said he was “excited to be entering into a direct deal with a prominent independent label like UnitedMasters, with its deep, diverse roster of independent artists. Together, we’re ready to amplify these voices and bring their music to a global stage, unlocking new opportunities for discovery”.
When it was first revealed that licensing negotiations with Merlin had been called off, a spokesperson for TikTok said it had decided to go the direct deal route because of “copyright legitimacy problems” with the music provided by some labels or distributors operating under the Merlin licence.
It argued it could better tackle streaming fraud if it had a direct relationship with each indie. But numerous representatives of the independent community have said that those claims are “disingenuous” and that the real issue is that Merlin, by representing a big network of labels, has more negotiating power, and can therefore secure better terms and rates out of digital platforms.
The open letter from IMPALA Executive Chair Helen Smith says TikTok’s bid to cut Merlin out of its licensing deals with the indies “poses significant risks, not only to the independent music sector but also to TikTok’s long-term interests”.
“TikTok is a well-loved platform, embraced by countless artists and loved by their fans across the globe”, she adds. “Independent labels and distributors have worked enthusiastically with TikTok and driven creative engagement on the platform”. Looking to the future, IMPALA’s members “are eager to work with TikTok to expand opportunities for independently released artists throughout Europe and maximise their unique role for TikTok's users”.
As part of that collaboration, the letter goes on, “we would like to discuss how to promote the diversity and sustainability of the industry while ensuring TikTok can benefit from collective licensing, as do all the other businesses with Merlin agreements”.
Suggesting that doing just that would also meet the objectives of European Union policymakers, Smith goes on, “Given the EU’s focus on such issues within its new framework for gatekeepers in digital markets, we are confident that fair and equitable solutions can be found”.
In the short term, IMPALA wants TikTok to return to the negotiating table with Merlin while continuing “to apply its current Merlin deal in its entirety to allow for good-faith collective negotiations to take place”. If that does happen, IMPALA says that indie labels that have opted to sign the new direct deal should be able to choose to continue operating under the old Merlin deal if they so wish.
Concluding, Smith says, “Let's work together to ensure that TikTok remains a powerful platform for creativity while supporting the growth and sustainability of the independent music sector for years to come”.