The relationship between the tech world and the music industry is facing a new wave of tension, with TikTok and MERLIN—a prominent organization representing independent music rights—at the heart of the disputes.
This clash is a battle over contracts and reflects broader challenges regarding compensation, platform control, and quality content on social media.
As TikTok grows as a major music discovery platform, its relationship with music rights holders like MERLIN has become increasingly important.
MERLIN represents a substantial portion of the global recorded music market, with over 20,000 labels, including influential independents like Ninja Tune and Beggars Group.
These organizations have long relied on collective negotiations to ensure fair payouts, and TikTok’s recent move to sidestep MERLIN by negotiating directly with individual labels is creating significant controversy.
In this article, we’ll break down the dispute and tell you how it affects the music industry:
Understanding the Dispute Between TikTok and Merlin
TikTok’s decision to end negotiations with MERLIN as a single entity, which sparked criticism from the independent music sector, is the main reason for the ongoing dispute.
TikTok cited concerns over streaming fraud—where low-quality, manipulated content undermines the platform’s integrity. According to TikTok, by working directly with individual labels, it can have better control over content quality and reduce cases of copyright abuse.
However, MERLIN perceives this strategy as a tactic to weaken the bargaining power of independent music organizations. They believe this reduces the payouts and benefits independent artists and labels receive.
This standoff puts millions of independent tracks on TikTok. If the company and individual labels fail to reach new agreements, the existing catalog of indie music available on TikTok could see significant cuts—potentially harming artist exposure.
The Importance of MERLIN in the Global Music Market
MERLIN is a powerful entity in the global music industry, representing approximately 15% of the world’s recorded music market.
Since its founding in 2008, MERLIN has advocated for independent music labels, securing fair representation and access to major digital platforms like Spotify, YouTube, and TikTok.
Through MERLIN, independent labels have historically been able to negotiate fair terms collectively, leveling the playing field with major labels that possess considerably more resources and influence.
The organization’s work has enabled artists signed with independent labels to benefit from equitable royalties and gain more control over their work’s distribution.
TikTok’s Divide-and-Conquer Strategy?
MERLIN and its affiliates argue that TikTok’s shift toward direct deals with individual labels represents a “divide-and-conquer” strategy, with potentially negative consequences for the independent music ecosystem.
By negotiating individually, TikTok reduces MERLIN’s collective bargaining power. It potentially allows the platform to secure lower payouts for artists and minimize other protections that collective agreements typically ensure.
This move is concerning for independent music labels because it weakens their negotiating power and may encourage other platforms to take a similar approach.
If other tech giants start favoring direct deals over collective agreements, this could lead to decreased revenue and reduced influence for independent artists and their labels.
This diminishes the achievements MERLIN has made in ensuring fair treatment for the indie music sector.
A Broader Pattern of Platform vs. Music Industry Conflicts
The conflict between TikTok and MERLIN is not unique: it echoes ongoing battles between tech companies and the music industry for fair compensation and control.
For instance, TikTok’s relationship with major music labels like Universal Music Group (UMG) has also been fraught with disputes. In recent years, major labels have pressed TikTok to increase payouts.
These tensions are rooted in the fact that music drives engagement on TikTok. Many viral videos are built around popular music tracks, allowing songs to gain widespread popularity almost overnight.
Music rights holders argue their content deserves more than just a backdrop for user-generated videos. Instead, they want fair compensation that aligns with the platform’s massive reach.
The Potential Impact on TikTok and Independent Artists
- TikTok’s Music Discovery Appeal: TikTok’s decision to bypass MERLIN could limit the availability of independent music, reducing the platform’s appeal as a discovery hub for indie music lovers.
- Impact on Independent Artists’ Payouts: Independent artists might face reduced payouts if direct deals offer less favorable terms than MERLIN’s collective bargaining power typically secures.
- Risk of Marginalization: By sidelining MERLIN, TikTok risks marginalizing independent voices on the platform, potentially limiting indie artists’ ability to compete alongside major-label acts.
- Financial Stability of Independent Artists: Without MERLIN's standard agreements, independent artists could face instability—with less reliable income from the platform due to potentially less advantageous contract terms.
- User Experience and Platform Diversity: Reduced indie music availability may alienate users who value TikTok for its broad, diverse music catalog, potentially impacting user retention and engagement.
Looking Ahead: What This Dispute Means for the Music and Tech Industries
The standoff between TikTok and MERLIN shows a broader need for cooperation between tech platforms and music rights organizations.
As social media and streaming platforms shape how audiences discover and interact with music, the relationship between tech giants and music rights holders will remain crucial.
Some potential solutions could involve:
- New royalty structures
- More robust tools for managing content quality
- Hybrid agreements
These may allow for individual deals and collective representation through entities like MERLIN.
At Reprtoir, we can help with catalog management, release building, royalty accounting, music sharing, and more.
Contact us for more details.
