Twitter’s music licensing talks hang in the balance after Elon Musk’s takeover (report)

Twitter considered licensing music rights from the three major label record companies, but the talks were “stalled” after Elon Musk acquired the social media platform.

That’s according to a report from The New York Times, which, citing multiple sources, said that Twitter started negotiations with Universal Music Group, Sony Music Entertainment and Warner Music Group in the fall of 2021. 

Twitter, unlike Facebook, Instagram and TikTok, does not have licensing deals with major music companies.

Music licensing rights require platforms to pay rightsholders whenever users post or play content with their songs. The costs of the licenses can be worth more than $100 million a year for established social media sites, according to the NYT’s report.

Five former employees reportedly told the newspaper that Twitter did not strike licensing deals in the past due to costs.

Facebook, in July 2022, announced that it would start to share a portion of advertising revenue with music rightsholders for user-generated content. 

In November 2022, Bloomberg reported that the three majors were negotiating new deals with another social media giant, TikTok, and were pushing for a share of ad revenues.

When Musk started hinting at plans to acquire Twitter in April 2022, some music industry leaders had expected his involvement to help fast-track the deals with the labels, the NYT said.

After his $44 billion acquisition of the company, Musk said in November that Twitter will begin offering monetization to “content creators” via a new revenue-sharing model.

Musk told Ron Baron, founder, Chairman and CEO of Baron Capital, in an interview at the time that he’s considering introducing long-form videos on Twitter and allowing creators to monetize their content.

The executive did not elaborate on whether the plans include offering a new revenue source for music rightsholders, artists, and creators.

The NYT, citing four sources familiar with the internal talks, says Musk’s team explored adding music to the platform and his lawyer, Alex Spiro, “held meetings to understand the status of the label negotiations and assess the costs”. 

Spiro, who has previously represented artists including Jay-Z and Megan Thee Stallion, left the social media company in December. He recently defended Musk in a Tesla shareholder lawsuit, the NYT reported.

Meanwhile, six sources reportedly told the NYT that “internal chaos” at Twitter “disrupted” the talks with the majors as the now Musk-led company dismissed some of the people responsible for the negotiations after several rounds of layoffs as part of cost-cutting measures.

Earlier this month, Musk said Twitter was recovering financially after taking drastic measures to improve its financial health.

Musk told a conference hosted by Morgan Stanley in San Francisco that the company could have positive cash flow in the second quarter after slashing some $3 billion of operational expenses.

Music Business Worldwide

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