TikTok Standoff with Merlin: Implications for Independent Music
TikTok is doubling down on its refusal to negotiate with Merlin, following its recent clash with Universal Music. The TikTok standoff with Merlin could have serious implications for the independent music sector and the platform’s content strategy.
TikTok Standoff with Merlin: Implications for Independent Music
by Chris Castle via Music Tech Solutions
Here’s some news, and make sure you’re sitting down: Still stinging from its encounter with Universal, TikTok wants its counterparties weak, divided and broke. So naturally TikTok is going after Merlin in TikTok’s latest concerted refusal to deal.
Let’s remember the basic premise behind Merlin, the licensing body that independent labels can opt into at their election. Independent labels as a group have a combined market share that is on par with a major label. I recall hearing this from Alison Wenham back when the Association of Independent Music was founded back in 1999. Joining together, independent labels could be strong, united and claiming their fair share right along side the major labels. (Unclear why this seems to be lost on the publishers.)
So after Mr. Tok got a spanking from Universal, TikTok are definitely not going to put up with resistance from independent labels, assuming TikTok are even in business by the time the dust settles. As Kristin Robinson reports in Billboard:
A TikTok spokesperson says that “TikTok would like to offer all of the world’s music to our users. We are committed to working with the independent sector as well as the major labels and publishers. We know that our community of over a billion music fans value the diversity and richness that independent music brings to our platform. We are committed to entering into direct deals with Merlin members in order to keep their music on TikTok.”
Founded in 2008, Merlin represents 15% of the global recorded music market, and it uses that collective market power to negotiate with digital partners on behalf of its members on a similar footing as the bigger major labels.
So there you have it: TikTok doesn’t want any lip from independents that might put them on the same footing as the majors anymore than the MIC Coalition wants lip from GMR. The one thing that TikTok cannot say is that it’s more efficient for the company to negotiate separately with independents. This isn’t about efficiency–it’s about stopping a near Universal-level exodus from happening again. And not just stopping it this time, it’s about stopping it forever.
In other words, crushing the resistance. That option wasn’t available to Mr. Tok when negotiating with Universal but it’s available now.
Of course you know that TikTok intends to hose the independents because the first thing they did before even discussing a potential deal is require the labels sign a nondisclosure agreement (which no doubt is nonnegotiable). Because nothing says transparency like secrecy. And what’s really great is that it’s no problem because nobody in the music business ever talks about their deals.
As Ms. Robinson reports:
Billboard obtained an email TikTok sent out to some Merlin members, stating that the short-form video app “decided not to renew [its] license agreements with Merlin” and that TikTok “may be able to do direct deals” with the labels, provided that they agree to sign a non-disclosure agreement (NDA). “The purpose of the NDA is to enable us to discuss direct licensing agreements with you.” The deadline to sign and return the NDA is Oct. 4. A TikTok spokesperson says, however, that any Merlin label that wishes to stay on TikTok after Oct. 31 can review and sign the TikTok and CapCut agreements anytime before Oct. 25.
Merlin told its members that it is doing “all [it] can to re-engage with TikTok… we have already made it clear to them that we are ready to hold an actual negotiation and address any concerns they may have.”
Actually, the purpose of the NDA is to keep the independent labels quiet under threat of lawsuit from Mr. Tok and his backers like Neil Shen and Sequoia China. TikTok’s feigned support for independent music is about as convincing as an ivory poacher joining PETA.
