Twitter would have scrapped its idea of making deals with record labels
Twitter is said to have abandoned plans to enter into music licensing agreements due to the very high cost of such a project. According to The New York Times, the social network was in talks with three major music labels when Elon Musk bought the company for about $44 billion, but those talks have since stalled. Such licensing agreements would give the company access to music from the label’s catalog, and in return the company would pay the rights holders a hefty commission.
Twitter would have scrapped its idea of making deals with record labels
Thus, users of the platform could use the entire catalog without fear of copyright infringement and other claims. Platforms like Instagram, TikTok and Facebook have already signed such deals with labels, Twitter is the latest to not have one. And she would have avoided it all along due to the high cost of such an operation, which could top $100 million given the size and popularity of the platform today, according to The New York Times.
Reduced costs compared to copyright management
“Twitter began negotiations with three of the largest music conglomerates – Universal, Sony and Warner – in the fall of 2021, according to six people familiar with the matter,”according to The New York Times. When Elon Musk took over the company, some employees were fired. Elon Musk has drastically cut the company’s payroll in recent months, leading to the departure of several high-profile individuals. These cost-cutting measures have gone as far as removing some employee benefits, leaving offices vacant, auctioning off furniture, and even raising fears of bankruptcy from none other than Elon Musk.
“The company had very little reason to justify paying tens of millions of dollars to music rights holders,”The New York Times reported. At the same time, Twitter fell into a storm several times due to copyright infringement on music. In 2021, Billboard reported that Twitter was reluctant to discuss possible record deals. Additionally, Billboard reported that the Recording Industry Association of America (RIAA) complained that it took “three to five days”for Twitter to respond to takedown requests for copyright infringement.