While the U.S. debates TikTok‘s future with potential ban legislation looming, the social media giant has quietly advanced its position in the music industry through several strategic licensing agreements, greatly reshaping how artists and rights holders are compensated on the platform.
On May 1, 2024, TikTok and Universal Music Group announced a new agreement following a contentious three-month period during which UMG had removed its entire catalog from the platform, citing concerns over artist compensation and AI protections.
The music giant rejoined TikTok after a three-month standoff over fair compensation and AI safeguards for artists.
The dispute highlighted fundamental tensions between traditional music industry revenue models and TikTok’s approach to content monetization. UMG had specifically criticized TikTok’s payment system, which previously allocated equal royalties regardless of whether songs received 20 views or 20 million views in videos.
Despite the public conflict, research indicated TikTok contributed approximately 1% of UMG’s total revenue in 2023, underscoring the platform’s value as primarily promotional rather than a direct revenue generator. For musicians looking to maximize their earnings, diversifying with sync licensing deals can provide more substantial income than relying solely on social media platform royalties.
TikTok has simultaneously modified its approach to independent music licensing, shifting from a model based on video creation counts to one based on view metrics. This adjustment, resulting in roughly a 4% difference in payments, introduces a market share component to royalty distribution while adding new “know your customer” requirements that place compliance responsibilities on labels and distributors to combat fraud and AI manipulation.
The platform’s decision to let its licensing deal with Merlin expire has forced many independent labels and distributors to sign direct deals with TikTok under these new terms.
Further solidifying its music industry infrastructure, TikTok renewed its agreement with International Copyright Enterprise (ICE) to guarantee continued legal use of ICE-represented compositions across its platform.
Additionally, ByteDance contracted Rumblefish, a division of SESAC Music Group, on June 26, 2025, to manage music data, licensing, and royalty administration for both TikTok and CapCut globally.
These developments reflect TikTok’s sophisticated strategy to strengthen its position within the music ecosystem even as political challenges mount. The new agreement includes comprehensive protections for AI development in the music industry, addressing one of UMG’s primary concerns about unauthorized AI-generated music.
For independent artists navigating this evolving landscape, understanding various royalty structures across platforms has become increasingly critical to maximizing earnings while maintaining creative control.
