Meta Platforms Inc. and Universal Music Group have entered into a new multi-year agreement, further solidifying the significant role of social media in enhancing the revenue streams of major artists. The deal, announced on Monday, expands Meta’s rights to use UMG artists’ music across its diverse platforms, including Facebook, Instagram, its virtual reality platform Meta Quest, and now, for the first time, WhatsApp. This agreement marks a significant milestone, as Meta gains the right to license UMG content on WhatsApp.
UMG, representing a roster of renowned artists such as Taylor Swift, Coldplay, Bob Dylan, Drake, Billie Eilish, Elton John, Adele, U2, Harry Styles, and Sting, has been a pioneer in music licensing for social media. In 2017, UMG became the first major music company to license its content to Meta, then known as Facebook, paving the way for a surge in user-generated content utilizing artist tracks as background music. This strategy, adopted by Warner Music Group and Sony Music Group in subsequent years, proved highly successful in generating new revenue streams for artists and resolving long-standing copyright disputes between record labels and social media platforms.
However, Meta’s decision last year to discontinue its Premium Music Videos platform had a substantial impact on major record labels’ finances. According to reports, Warner Music Group is experiencing a quarterly loss of $10 million due to this change.
The Meta-UMG agreement arrives amidst a larger discourse surrounding the use of music in AI development. UMG recently engaged in a dispute with TikTok, a direct competitor to Meta in numerous product areas. The dispute stemmed from UMG’s concerns about TikTok’s handling of music copyrights in the training of AI models. As a result, UMG temporarily removed its catalog of 4 million songs from the platform in March.
The companies eventually reached a new agreement in May, addressing UMG’s concerns and ensuring that TikTok and UMG would collaborate to safeguard artist rights and the economics of the music industry in the context of AI development. TikTok committed to removing unauthorized AI-generated music from its platform and to implementing tools that enhance artist and songwriter attribution.
The growing concern regarding AI and its potential impact on the music industry has been expressed by numerous artists. In an open letter earlier this year, artists including Billie Eilish, Stevie Wonder, Nicki Minaj, Elvis Costello, Norah Jones, and Kathy Perry urged AI developers to cease the use of “predatory” AI technology that could undermine or replace human artistic contributions. They emphasized that the unrestricted use of their music to train AI systems posed a threat to creators’ rights and the overall music ecosystem.
In response to these concerns, TikTok announced the establishment of a new internal team dedicated to acquiring music rights. This move signifies TikTok’s intention to control its music library and potentially offer users AI-generated music based on their preferences, potentially bypassing record labels altogether.
The Meta-UMG agreement underscores the evolving relationship between social media platforms, music industry giants, and the increasingly complex landscape of artificial intelligence. It highlights the importance of safeguarding artist rights, while simultaneously exploring the potential of AI technology in the music industry.
