‘This is Bad For The Indies’: TikTok Ends Licensing Talks With Merlin

TikTok is donning the familiar black hat.

Reps for the short-video streaming specialist “walked away” from talks to renew its license with Merlin’s members “before negotiations even began,” according to Billboard, which cites an internal message distributed to the independent rights agency’s community.

TikTok “informed us that they do not want to renew our deal,” the letter reportedly states. “They informed us that… they intend to license some of our members directly.”

The suggestion of a divide-and-conquer approach will rankle will Merlin, which was formed on the basis that numbers creates strength at the bargaining table.

The letter continues, “Their approach [to pursue direct deals with Merlin members] suggests that [TikTok] believe[s] their objectives can be better served by fragmenting the Merlin membership, in order, we believe, to minimize their pay out,” Billboard reports. “As you know, Merlin was founded to stand up for and champion its members. We will not support an approach that devalues our community.”

The current license arrangement is set to expire at month’s end, from Oct. 31. If a deal isn’t struck, millions of independent works which currently live on the platform will no longer be monetized.

“This is bad for the indies,” one independent label chief told The Music Network.

The situation has echoes of a licensing spat between Universal Music Group and TikTok earlier in the year, which spilled into an unusual slanging match.

First, UMG went on the offensive, blasting TikTok for trying to undercut creators, failing to keep its networks free of bogus content and its users safe, and using bully tactics and intimidation during discussions.

TikTok responded by saying that, “despite Universal’s false narrative and rhetoric, the fact is they have chosen to walk away from the powerful support of a platform with well over a billion users that serves as a free promotional and discovery vehicle for their talent.”

Despite the harsh words that were sprayed, a deal was later struck.

According to Billboard, TikTok distributed a message to some Merlin members, in which it claims the 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 said to be this Friday, Oct. 4.

Meanwhile, a TikTok rep tells MBW that the platform has “had operational challenges with Merlin in the past where music that is not quality controlled for copyright is delivered [to TikTok].

“It presents a big burden, and doing direct deals allows us to exercise better control and also to forge closer relationships with Merlin members.

Founded in London by Australian born-and-raised music executive Charles Caldas, Merlin opened for business in 2008.

Today, the organisation represents 15% of the global recorded music market, including record labels, distributors, label services companies, and other rightsholders.

Its members include Beggars Group, CD Baby and Downtown Music (including FUGA), Domino, Epitaph Records, Mushroom Music, Ninja Tune, Sub Pop, and thousands more.

The ByteDance-owned TikTok in 2023 launched a so-called “test” on Australian users that limited the licensed music some users can experience on the app, a move that was broadly criticised here and abroad.