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SUPER BOWL ADVERTISERS SQUEAK UNDER THE WIRE OF UNIVERSAL MUSIC’S TIKTOK BLACKOUT

MICROSOFT AND PEPSICO’s starry are posting Tiktok videos featuring universal Music group stars, but brands without licensing deals in place don’t have that option

By Patrick Coffee from The Wall Street Journal

A spat between TikTok and Universal Music Group, the world’s largest music publisher, is threatening to upend some marketers’ plans for the soundtracks to their campaigns.

Brands such as Microsoft and PepsiCo’s Starry soda have in recent days used TikTok to promote Super Bowl campaigns featuring the music of Universal artists. Starry is posting TikTok videos using the song “Deli” by rapper Ice Spice, for example, to amplify the effect of its Super Bowl commercial using the same track.

But they are only able to do so because they signed contracts with Universal before the company stopped licensing songs to TikTok earlier this month, said people familiar with the matter.

Universal songs began disappearing from millions of TikTok posts on Feb. 1 after the companies failed to agree on a new licensing contract. Universal says TikTok is refusing to pay artists at rates comparable to other platforms; TikTok counters that Universal’s greed inspired it to walk away from a free promotional platform for its artists.

Beyond requiring TikTok to remove all unlicensed uses of its songs, Universal has also paused signing new deals that would allow brands and creators to publish its artists’ music on TikTok, according to the people familiar with the matter.

The changes affect not only music by Universal’s signed acts, which include megastars like Taylor Swift and Drake, but will also apply after a 30-day grace period to songs controlled by Universal’s publishing division even if the artists are signed to other labels. That could drag tracks by performers such as Harry Styles and Adele into the drama.

Major brands and superstar creators alike have had to reconsider campaigns and content they had planned for the coming weeks and months, if they were intended to feature Universal music.

“This has now paused how we are thinking and planning for our brand clients,” said Emma Harman, chief client officer at Whalar, a company that connects creators with marketers“It’s a shame. It’s sort of impacting everybody.”

One client that recently considered licensing a Universal song for a campaign decided not to after realizing that paid TikTok posts, which were to be an important part of its media strategy, couldn’t include it, said Josh Rabinowitz, founder of consulting firm Brooklyn Music Experience, which develops music strategy for brands.

The dispute also presents a delicate balancing act for Universal. The music giant runs the risk of limiting its artists’ ability to leverage TikTok’s immense influence, thereby ceding market share to rival publishers and independent performers, said Joe Gagliese, co-chief executive of marketing and talent management firm Viral Nation.

“In the absence of Taylor Swift, are we still going to have trending songs [on TikTok]? I would argue yes,” he said.

A number of marketers have already begun looking elsewhere for music to use in their TikTok campaigns, said Dave Kersey, chief media officer at ad agency GSD&M.

Brands want to use the music they license without restraint, Kersey said. TikTok’s remaining library of licensed music has plenty of material for brands and creators to use even after Universal pulled its entire catalog, he said.

Universal and TikTok are likely to resolve their differences quickly, because TikTok’s influence on the music industry cannot be overestimated and because Universal will want to resume signing licensing deals with brands that include TikTok, said Gagliese.

“It’s not like the entire industry relies on licensing this music,” he said. “It’s just such a nice-to-have.”

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