Twitter explored music licensing from the three record labels before talks stalled after Elon Musk took over the company, eight people familiar with the matter said, but they were not authorized to speak publicly.
Twitter is one of the last major social media platforms without a music licensing agreement, allowing the sites to host nearly any commercially available audio content without fear of removal or legal retaliation. Facebook, Instagram and TikTok have all struck deals on music rights.
Twitter has avoided signing music rights agreements, which would require the social media company to compensate rights holders when users post or stream content featuring songs. The cost of a license can vary, but can run well over $100 million per year for an established social media platform. Twitter ditched the licensing deal because of cost concerns, five former employees said.
Twitter and Musk did not respond to requests for comment.
Twitter began talks with the three major music groups — Universal, Sony and Warner — in the fall of 2021, according to six people familiar with the matter. When Mr. Musk announced his intention to buy the company last April, some music industry leaders saw his involvement as an opportunity to finally close the deal.
“Twitter uses a lot of music, but unlike every other major social media platform, it refuses to license music or compensate songwriters,” said David Israelite, chief executive of the National Association of Music Publishers, an industry group. tweets That month was with Mr. Musk. “please help.”
For music companies, the licensing deal with Twitter not only represents an additional revenue stream, but also solves a long-standing problem Piracy on the platform.
Negotiations continued after Mr. Musk bought Twitter for $44 billion in October because of his concerns about Challenge Douyin and the resurrection of Vine, the once-popular short-form video app that Twitter acquired in 2012 but shut down in 2016.
Mr. Musk’s team is intrigued by the idea of adding music to the platform, and his personal attorney Alex Spiro, who has also held meetings on behalf of artists including Jay-Z and Meghan Jockey, has knowledge of the label talks. State and assess the cost, said four people familiar with the internal discussions.
Mr. Spiro, who oversaw Twitter’s legal portfolio during Mr. Musk’s acquisition, left the company in December. He successfully defended Musk in a Tesla shareholder lawsuit this year.
Negotiations have been disrupted by internal turmoil following Musk’s takeover of Twitter, six people familiar with the matter said. The label has fired some of the people in charge of music rights negotiations in several rounds of layoffs, leaving labels with few remaining Twitter contacts, and four people at major music labels said they were aware of the discussions.
Musk’s team has also slashed hundreds of millions of dollars in Twitter’s spending — office rent arrears, software supplier shortages, and data center cancellations — while demanding that every financial outlay be justified under the new budget. Based on those grants, the company has little to no way of justifying paying tens of millions of dollars to music rights holders, two people familiar with the matter said.
