Worldwide Independent Network has said that there is “widespread concern” in the sector over TikTok’s significant shift in its relationship with the indie sector.
Independent labels body IMPALA last week raised the alarm about TikTok’s decision not to continue its licensing agreement with Merlin. Instead of working with labels on a collective basis through Merlin, the digital licensing agency for the independent sector, TikTok will now do direct deals with indies.
With more than 500 members representing over 30,000 record labels, distributors and rights-holders around the world, Merlin currently accounts for 15% of the global recorded music market and has deals with over 40 digital services.
In a statement, Worldwide Independent Network (WIN) said there is “widespread concern across the global music industry” about the switch to direct licensing, adding that many “fear that with this move TikTok intends to pay less for music”.
“TikTok’s decision to walk away from Merlin puts independent labels in an impossible place with their artists: it’s a choice between their music being available on the platform or ensuring fair licence terms,” said Zena White, WIN chair.
Noemí Planas, WIN CEO, added: “Merlin was created by independent music companies to compete at the highest level and ensure they can access the best terms. TikTok’s decision poses risks to cultural diversity, market access, and fair payment for independents. But this is not just about TikTok. We urge policymakers around the world to regulate the tech sector to ensure a truly competitive market where creators' rights are protected from abusive and monopolistic behaviour.”
It follows TikTok’s licensing dispute with Universal Music Group (since settled) amid wider concerns about a ‘value gap’ with the platform.
TikTok declined to comment directly on WIN’s statement today (October 14).
Last week a TikTok spokesperson suggested there had been “operational challenges with Merlin in the past where music that is not quality controlled for copyright is delivered”.
"TikTok would like to offer all of the world's music to our users,” added the spokesperson. “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.”
Jong-Gill Shin, secretary general of the Record Label Industry Association of Korea (LIAK), said: “LIAK expresses profound concern over the current circumstances, which pose a significant risk of fostering discrimination against creative works. It is imperative that all music, regardless of whether it originates from major or independent sectors, be accorded equal value and recognition. We unequivocally oppose TikTok’s recent attempts that threaten to undermine our efforts to secure equitable terms. Aligned with our fellow WIN members globally, we stand resolute in our commitment to upholding and safeguarding the intrinsic value of independent music.”
TikTok’s decision to walk away from Merlin puts independent labels in an impossible place with their artists
Zena White
China's neighbours have also raised concerns about TikTok's compliance with data protection laws. India banned the app in 2020 over national security concerns.
In the United States, the second largest market by number of TikTok users with 120.5 million, President Biden signed a law that would ban TikTok unless parent company ByteDance sells its stake.
Richard Burgess, CEO of the American Association of Independent Music (A2IM), said: “TikTok’s unwillingness to negotiate a licensing deal with Merlin is just the latest example of the platform doing whatever it can to avoid compensating artists fairly. Now, more than ever, we need Congress to enact the Protect Working Musicians Act and give musicians, songwriters, independent labels, and publishers the ability to negotiate collectively in the marketplace.”
Similar concerns have been raised in Canada, where the music community is currently engaged in the regulatory process around the Online Streaming Act.
Andrew Cash, president and CEO of the Canadian Independent Music Association (CIMA) said TikTok’s decision “should act as a wake-up call to Canadian policy makers and politicians engaged in regulating the tech sector”.
TikTok was the fastest-growing social media platform in Latin America in 2023.
“From a Brazilian perspective, TikTok’s decision not to renew the agreement with Merlin could weaken the representation of independent music, which plays a crucial role in promoting cultural and regional diversity,” said Felippe Llerena, president of the Associação Brasileira da Música Independente (ABMI). “Without a collective agreement, small labels may have more difficulty negotiating individually, negatively impacting their visibility and participation on a platform as relevant as TikTok.”
Brazil ranks third in TikTok users by country, with 105.3 million, followed by Mexico, with 77.5 million users.
Concerns have also been raised in other markets of the region.
“It is extremely detrimental for the independent sector in Latin America that TikTok is applying this pressure to bypass Merlin,” said Francisca Sandoval, president of Asociación Gremial Industria Musical Independiente de Chile (IMICHILE). “The very purpose of Merlin is to ensure fairer and more equitable representation for all, especially in regions like ours, and we stand by it. The most affected will be the smaller players, who will have few options, and our biggest fear is that they will end up facing the worst conditions.”
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