TikTok’s decision to boycott Merlin and pursue direct deals with Merlin’s member labels is a troubling move that undermines the rights of labels to choose how they license their music. While TikTok sees the shift as a way to tackle streaming fraud, it’s clear the real motivation is to weaken the bargaining power of independent brands and use that leverage to suppress rates.
Over the past 16 years, Merlin has developed strong partnerships with more than 40 digital services companies around the world. These partners recognize the value Merlin brings – efficiency, scale and a deep understanding of the independent music community. TikTok’s move to exclude Merlin isn’t about preventing fraud, but about undermining the ability of independent brands to obtain competitive terms, not just now but in the long term. The ultimate consequence of TikTok’s refusal to negotiate with Merlin for the music that generates billions of dollars in revenue for TikTok will be to harm artists’ ability to make a living from their art.
This strategy is not new. It echoes the music industry’s historical struggles with partners such as terrestrial broadcasting and MTV, both of which profit hugely from the use of recorded music while refusing to pay artists on the pretext of “promotional value” or “exposure” – —ostensibly to sell an artist’s CD or LP. In this predominantly digital economy, streams are sales – and TikTok has been widely reported to pay rights holders far less than other services for equivalent music usage.
Richard James Burgess, President and CEO, A2IM
The independent label chose Merlin to license its rights because of its expertise, experience and track record in closing such deals. This ensures pay levels at which they can compete with professionals and protects independents from unfair exploitation. TikTok’s decision to bypass Merlin and demand direct transactions is an infringement of the freedom of small and medium-sized enterprises to determine their own business strategies. The fact that TikTok is giving Merlin members days to accept TikTok’s terms or lose access to its massive platform is an unfair exercise of its market power.
We believe this apparent divide-and-conquer strategy is designed to exploit independent artists’ dependence on the TikTok platform and thereby keep their compensation low. This is not about solving the fraud problem or improving the digital music ecosystem. In fact, as the number of licensing deals TikTok needs to strike increases exponentially, and it loses Merlin as a partner in combating fraudulent material, more fraud is likely to follow. Merlin simplifies the licensing process, making it easier for the platform to access diverse independent music. Splitting the system would hurt artists and fans, and would limit the range of music available on TikTok.
At its core, this issue is about respecting the rights of independent record labels to decide how their music is licensed. TikTok’s behavior does not reflect a problem with Merlin; it reflects TikTok’s disrespect for the value of music. All other major platforms have reached responsible agreements with Merlin, balancing service needs with optimized compensation for artists. By refusing to do so, TikTok sets a dangerous precedent for recording artists and their labels.
TikTok must stop damaging and disrespecting the independent music community. It can do this by working with the rights management authority chosen by the record labels to establish a fair and transparent licensing system that benefits all stakeholders in the music ecosystem. Independent record labels have the right to choose their representatives to negotiate deals that truly reflect the value of their artists’ creative contributions. Anything less does a disservice to artists and fans, and undermines the fabric of music culture.
Dr. Richard James Burgess is a renowned musician, singer, songwriter, record producer, composer, author, manager, marketer and inventor, currently serving as President of the American Association for Independent Music (A2IM) Chairman and Chief Executive Officer.
