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3 Reasons Why UMG’s TikTok standoff is almost over and why a US ban won’t change much

In February, UMG started the process of removing its publishing (UMPG) and recording catalog from TikTok after licensing talks broke down. This story has happened with other platforms before (for example: YouTube and WMG in 2008). On April 23rd, The US Senate approved a bill that once signed by the president, will force parent company ByteDance to divest its interest in TikTok to a US based company.

TikTok has two crises’ happening at the same time but here are ___ reasons why the UMG standoff is almost over and why a US ban ultimately won’t change much.

1. UMG and TikTok have already started talking again

According to Billboard, UMG and TikTok have already started talks for a new licensing deal. Record producer Vince Valholla predicted that a deal would be reached in under 6-8 months. It seems he may be right. UMG’s catalog accounts for more than 60% of the songs that hit the Hot 100 in Q4 so we believe both parties have an interest to settle things to get a deal in place. At least for now.

2. It could take years for this ban to take effect

As we mentioned, the bill is expected to be signed by the president soon but according to language appearing in the bill, ByteDance would have nine months to divest and find an American buyer for TikTok once the bill is signed into law. The president can extend that time by 90 days so that means that if ByteDance doesn’t find a buyer, and shuts down, that won’t happen in the US for more than a year from now.

3. ByteDance can sue, and most likely will

ByteDance has already said they plan on suing to block the implementation of the statute. That means that it would put a stop clock on the ban indefinitely. That could delay things for more than 2 years.

In short, we can guess that UMG will make up with TikTok soon and ByteDance will ultimately sue which will delay this even further. So, for now – don’t panic. TikTok is still in the game. For now.