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After the falling out between TikTok and Merlin in regards to negotiating a new license, indie collective IMPALA says it opposes the move.
The Independent Music Companies Association (IMPALA) has raised concerns about TikTok’s boycott of Merlin. The licensing deal in place for Merlin’s music ends on October 31 and TikTok has signaled that it will not bargain with the indie collective that represents 15% of the global recorded music market. Instead, TikTok is seeking to divide and conquer by licensing directly with Merlin’s members—potentially paying far less than a collective license deal.
“This is a concern as Merlin plays a crucial role collaborating with services, providing efficiencies, diversity, and consumer choice,” IMPALA says in its statement against the move. “It also delivers access to market and value for members as well as economies of scale for licensees by assembling a multitude of rights owners in a collective one-stop shop.”
IMPALA already spoke out on streaming reform proposals in April 2024. “Music is key content for these services and a significant part of their value. As such, the value of music must be respected and it is to everyone’s benefit that we all work together to uphold and enhance that value,” IMPALA’s statement at the time reads.
Now with the Merlin fall out, IMPALA says it believes TikTok’s clear aim is to “pay less for music, with many labels concerned they would be excluded” from deal-making. Labels’ freedom to decide how they deal with their rights is being attacked, with TikTok seeing a boycott of Merlin. TikTok also loses out as it will not have access to the same diversity, something which has already been underlined as important for the platform.
“Labels should be free to decide, this is a question of principle and TikTok’s boycott should be called out,” says Dan Waite, Chair of IMPALA’s Digital committee. “Record labels have entrusted their rights to Merlin to negotiate on their behalf and by TikTok going directly to rights holders they are disrespecting the licensing agreements that are in place. Like a supermarket chain negotiating directly with individual farmers for the price of their milk, it’s difficult to see how this can work out in the farmers’ favor.”
“Given the timing, it seems clear that TikTok’s real intention is to fragment the sector and drive down the value of independent music, rather than deal with streaming manipulation,” adds Mark Kitcatt, Chair of IMPALA’s streaming group. “There is clearly a huge value gap already in terms of revenues for paid music. TikTok’s move underlines the power it has in the market. It will harm cooperation to end streaming fraud, increase friction and inefficiency and diminish choice for TikTok’s customers.”
TikTok’s primary concern is streaming fraud and manipulation, which has taken a front-seat in this issue. But IMPALA’s Helen Smith says it’s hard to see how bargaining individually with labels will prevent stream manipulation as stated by TikTok.
“Dilution is of course an issue in every deal and that will continue,” Helen Smith, IMPALA Executive Chair comments. “It’s hard to see how direct deals could address this better than a Merlin deal. Surely the issues are better addressed on a collective basis in a standardized way? This feels like a smoke screen for boycotting Merlin given the history and the timing and the fact that the whole industry is working hard on this important issue.”
“We invite TikTok to see the value of a renewed collective deal through Merlin and collaborate on growing this important part of the ecosystem,” Smith continues. “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 standardized efforts on fraud, will prevail and look forward to growing this vital part of the ecosystem.”
