Merlin, an independent music licensing representative, said TikTok “refuses to negotiate” a new licensing agreement before it expires on October 31.
Merlin, whose members include well-known independent companies such as Because Music, Downtown Music, Mushroom Music, Reservoir Media and others, said TikTok “left before negotiations began” and “without any warning.”
In a letter sent to Merlin members last week and seen by MBW, the group claimed that TikTok intended to grant licenses directly to “some” of its members, rather than negotiate a deal with the group on behalf of its entire membership.
In a statement to MBW today (October 1), a TikTok spokesperson confirmed that the platform plans to enter into a direct deal with Merlin members.
“We are committed to reaching direct agreements with Merlin members to keep their music on TikTok.”
Douyin spokesperson
“TikTok wants to make all the music in the world available to our users,” a TikTok spokesperson said. “We are committed to working with the independent industry as well as major labels and publishers.
“We know that our community of more than one billion music fans values the diversity and richness that independent music brings to our platform. We are committed to reaching direct agreements with Merlin members to keep their music on TikTok.
Merlin told its members in a letter last week that it interpreted TikTok’s decision to allow its deal to lapse as “[fragment] We believe that Merlin members are trying to minimize their expenses.”
“Given TikTok’s refusal to negotiate with us, our view is that their obligation to pay fair royalties must be viewed as a nuisance,” Melling claimed in the letter.
“Given TikTok’s refusal to negotiate with us, our view is that they must view their obligation to pay fair royalties as a nuisance.”
Merlin
It added: “They must view Merlin as an overly powerful negotiating partner for their liking, and Merlin’s mission is to protect and maximize the value of our members’ music.”
Merlin told members it was making every effort to “reengage with TikTok to ensure our members renew their agreements.”
MBW understands that independent labels have until October 25 to sign direct agreements with TikTok and CapCut in order for their catalogs to remain on the platform from November 1.
Merlin claims to represent 15% Recorded music market. Founded in 2008, it is a digital music licensing and membership organization that collectively negotiates deals on behalf of its independent label, publisher and other rights holder members.
In a letter sent to its members last week, Melling said TikTok’s new approach of wanting to deal directly with independent music companies rather than negotiate with Melling on behalf of its entire membership “devalues our community.”
The letter added: “TikTok has asked us to make an ‘orderly transition’ to engage in direct transactions with members they deem worthy. As you know, Merlin was founded to support and support its members.
Merlin recently negotiated on behalf of its members to renew a “strategic partnership” with Facebook parent company Meta, which covers Meta’s assets Instagram, Facebook and Messenger.
In a letter to its members, Merlin cited the reasons behind TikTok’s decision to let the deal lapse, explaining that TikTok had signaled it was “abandoning” negotiations due to “concerns” about streaming fraud.
Merlin argued that “as we say [TikTok] They have mentioned on many occasions that we are very proactive on this issue.”
The letter continued: “We have long recognized the growth and impact of manipulative and deceptive content streaming on TikTok and the market as a whole, and have communicated with TikTok about this.
“We have worked productively with TikTok on this issue and, to date, no one has expressed concerns about the approach taken by Merlin. We have measures in place to address illegal activity and content; automated systems to detect suspicious activity; and a dedicated team to resolve issues and impose sanctions, including ultimately terminating bad actors’ memberships.
Merlin’s licensing dispute with TikTok comes four months after the National Music Publishers Association (NMPA) decided not to renew its licensing agreement with TikTok. The NMPA deal closed on April 30.
US trade body tells its members if they want to continue licensing their music to Tik Tok They will need to “directly participate” in the platform after the April 30 deadline.
Later, it was reported that the NMPA decided to invalidate the deal with TikTok Part of Universal Music Group Initially refused to relicense its recorded music and music publishing to Tik Tok. UMG and TikTok reached a new licensing agreement in May.
You can read the full text of Merlin’s letter below:
Dear Merlin Member,
On August 5, we informed you that we expected to enter into difficult negotiations with TikTok.
Last Wednesday, without any warning, TikTok pulled out of negotiations before they even began. They told us that (1) they do not want to renew our agreement, which expires on October 31st, and (2) they intend to license some of our members directly. To be clearer, unfortunately, as of now, there will be no Merlin-TikTok deal after October 31st.
We think the most likely reason TikTok is doing this is that TikTok doesn’t want to pay a fair price for the music that powers its platform. If this is correct, then TikTok does not value independent music, the independent labels and publishers that support that music, or the diverse artists who create that music. They were different from all the other partners Merlin had worked with.
TikTok pays a lot less for your music than other services, apparently because it’s believed that artists can’t afford to have their music unavailable on the platform. We made sincere suggestions to close the gap, but instead of negotiating, TikTok chose to walk away.
Given TikTok’s refusal to negotiate with us, our view is that they must view their obligation to pay fair royalties as a nuisance. They must view Merlin—whose mission is to protect and maximize the value of our members’ music—as a negotiating partner that is too powerful for them. Their approach demonstrates their belief that their goals can be better achieved by decentralizing Merlin membership, which we believe minimizes their expenses.
TikTok is asking us to make an “orderly transition” to direct transactions with members they deem worthy. As you know, Merlin was founded to safeguard and support its members. We will not support practices that devalue our communities.
The Merlin team remains committed to building meaningful relationships between our members and partners and bringing value to every partnership. This includes a dedicated team to answer member inquiries on all aspects of our partnerships, operational support, best practice guides, partner-led and Merlin-led webinars, comprehensive promotional forms and more.
We are making every effort to re-engage with TikTok to ensure our members renew their agreements. We have made it clear to them that we are prepared to engage in real negotiations to address any of their concerns. TikTok also said they were leaving due to concerns about “fraud,” but as we’ve told them multiple times, we’re very proactive on this issue.
We have long recognized the growth and impact of stream manipulation and deceptive content on TikTok and the market at large, and have communicated with TikTok about it. We have worked productively with TikTok on this issue, and to date, no one has expressed concerns about the approach taken by Merlin. We have measures in place to address illegal activity and content; automated systems to detect suspicious activity; and a dedicated team to resolve issues and impose sanctions, including ultimately terminating the membership of bad actors.
As always, members must make their own decisions about how to respond to TikTok. For our part, no matter how this situation is resolved, we will never stop fighting for the value our members bring to the table.
We will follow up via a separate email with any answers to your operational questions.global music business
