Amid the end of a deal with Merlin, TikTok is reportedly proposing dramatically reduced compensation terms to individual indies. Photo Credit: Solen Feyissa
A little over a week after word of the TikTok-Merlin split surfaced, new details are emerging about the direct-deal terms being offered to individual indies.
We’re now three weeks out from the expiration of the TikTok-Merlin agreement, which, in the absence of a last-minute change of heart and renewal, will conclude on the 31st. Without retreading too much ground – we’ve already broken down the abrupt split, the indie-space reaction, and, closer to the top of 2024, the since-resolved licensing dispute between the platform and Universal Music – this doesn’t necessarily mean indies are exiting TikTok.
Rather, like with the National Music Publishers’ Association’s lack of an across-the-board TikTok tie-up on the compositional side, the appropriate labels are still free to hammer out deals with the ByteDance subsidiary.
Unsurprisingly, the initially mentioned details are pointing to TikTok’s floating far-from-lucrative terms in these direct talks.
Amid apparent belt-tightening efforts at the short-form giant, which is shutting down its namesake standalone streaming platform, higher-ups have forwarded “at least three different TikTok contracts” to various indies, per Variety.
The outlet opted against diving into the NDA-protected specifics at hand, but citing anonymous sources with knowledge of the matter, it did indicate that one such deal would pay “‘less than half’” the current rate under Merlin.
Stated bluntly, evidence strongly suggests that this present rate is itself not ideal; scratching the surface here, TikTok music usages reportedly pay a flat sum per video regardless of view count.
Moreover, the newly proposed terms, which the involved labels must approve by October 25th to avoid takedowns, are reportedly being sent out as “standardized contracts” for smaller players, with the app engaging in actual talks with larger indies.
Said contracts are reportedly light on “protections” (presumably referring at least in part to AI, which UMG cited as a hang-up in its own TikTok dispute).
In other words, the current month could well see a substantial amount of music exit TikTok, which has, of course, refuted criticism of its direct-licensing approach and emphasized alleged fraud-detection shortcomings on Merlin’s part.
Taking a step back, it’s worth reiterating that the controversial platform has in recent years quietly made a number of moves seemingly designed to bypass labels altogether.
Those moves – among them the rollout of the SoundOn distribution service, robust creator-subscription options, and even a talent-discovery competition for unsigned acts, to name just some – are particularly significant against the backdrop of the indie negotiations.
Though it’d be difficult for TikTok to put a positive spin on once again losing a portion of its song library, more pressing for it (and, to a lesser extent, pretty much all industry stakeholders) is the growing chance of the app’s shutdown in the U.S. As things stand, TikTok has until January 19th to sell, which it’s adamant would be impossible, or cease operating in the States.
