TikTok can tick Universal Music Group off its enemy list. 

Four months ago, the music giant pulled all its music off TikTok, saying the social media platform paid artists a pittance. Now the two companies have reached a detente with a new licensing agreement. While we don’t know who made what concessions, a few themes stand out in their public statements. The big ones? Money and AI.

Diss Tracks

UMG and TikTok’s statements when UMG first yanked its music were extraordinarily waspish, so the truce is somewhat of a surprise. The conflict sparked amid the broader backdrop of UMG’s drive to shake up the music streaming and digital licensing landscape. According to UMG, this isn’t just about royalties: the new agreement includes a promise from TikTok to build app-specific products that benefit UMG artists, which include Taylor Swift, Billie Eilish, and Ariana Grande.

Tatiana Cirisano, senior music industry analyst at MIDiA, told The Daily Upside that the new deal enmeshes UMG’s music into TikTok’s burgeoning e-commerce business — something along the lines of TikTok showing users a link to buy tickets to see the artists singing the latest inexplicably viral song. Cirisano also noted the deal includes a new feature that betrays one of UMG’s big fears: “The mention of an ‘Add to Music App’ feature reflects the music industry’s concern that music fandom is getting ‘trapped’ on TikTok and not always flowing through to streaming platforms, which are the biggest revenue driver for companies like UMG,” she said.

Another key change is TikTok promising to do something, anything, about AI:

• “For UMG, the AI point is not just about tracking AI uses of music, and stopping the spread of unauthorized deepfakes,” Cirisano said. “It is also about the potential for ByteDance to, at some stage in the future, simply substitute human music for AI music, which would lower ByteDance’s music licensing costs.”
• UMG has also been addressing AI-generated music with streaming deals. An agreement last year with music streamer Deezer revamped how Deezer remunerates human artists versus “white noise” tracks, which are easily generated using AI (or even just playing a looped bit of audio of a washing machine).

Remixing: Kriss Thakrar, a music analyst and consultant at MIDiA, believes the carve-outs UMG has won around AI could set an industry precedent. “The threat of AI diluting the royalty pool is going to be a big theme in all future negotiations with any social or streaming platform,” said Thakrar. “The tools TikTok will implement to improve attribution toward modified audio is likely to become a standard in deals going forward. The rise in consumer creation that MIDiA has been tracking has led to a significant increase in the amount of music being modified and remixed by the next generation of music fans.” To be fair, how can the general public seriously resist the siren song of Johnny Cash singing Barbie Girl?

UBS is having severe indigestion problems. 

It’s been about a year since the Zürich-based financial giant somewhat begrudgingly agreed to acquire beleaguered compatriot Credit Suisse as part of a state-sponsored rescue plan, and it’s still struggling to figure out what to do with its costly new toy. One thing seems clear, according to a Reuters report on Thursday: UBS wants to cut costs. A lot of them.

Deep Cuts

There have been upsides to the Credit Suisse acquisition. In many Swiss markets, the bank now has a double-digit market share, according to a domestic banking industry review by Switzerland’s Competition Commission (of course, this may present its own issues if the agency seeks regulation). But otherwise, Credit Suisse has mostly been agita. In its recently published 2023 annual report, UBS said it “achieved underlying profitability in 2023, despite the fact that Credit Suisse was, and remains, structurally loss-making.”

In particular, the slow integration of Credit Suisse has only exacerbated existing problems with UBS’s asset management unit — with both parts of the business now expected to face cuts: 

• While the acquisition of Credit Suisse swelled the asset management unit’s invested assets to $1.6 trillion at the end of fiscal year 2023 compared to $1.1 trillion a year before, operating expenses last year leapt by 35%, and underlying profit before tax fell 5%. Also of note: the unit saw net outflows of $12 billion in the fourth quarter, a significant blow for an industry typically reliant on ever-increasing scale.
• It’s why the bank is now looking to cut some $300 million in costs in the unit, sources told Reuters, which is likely to include layoffs of back-office staff who came to the company with Credit Suisse.

Overall, the bank’s goal is to reduce the unit’s cost-to-income ratio from around 80% to 70% by 2026.

Caviar Crowd: Sources also told Reuters that parts of the asset management division could be folded into the bank’s wealth management unit, which powers much of the company. Last year, wealth management generated over half of UBS’s revenue, while asset management drove just 7%. In this instance, wealth makes health.

Where’s the beef? In the discount aisle. 

Beef prices have taken a tumble as commodity traders anticipate US demand will weaken due to avian flu affecting the country’s cattle herd, the Financial Times reported.  

Case of the Flu

As of the end of April, the US Department of Agriculture reported finding the avian influenza strain, H5N1, in 34 herds of cattle in nine states. The virus doesn’t typically infect humans, and it has a difficult time spreading from person to person, but it can be quite deadly. The World Health Organization says 889 H5N1 infections in humans occurred from 2003 to 2024, and slightly more than half resulted in death. Between 2022 and 2024, only two people in the US have been infected and they both recovered, according to the USDA. 

Though the USDA has banned infected cattle from crossing state borders and says beef and dairy supplies are safe, concerns about a wider outbreak have stoked anxiety:

• Cattle futures have surged to record highs in recent months because of droughts contributing to the country’s smallest herd since the 1950s. But live cattle futures traded on the Chicago Mercantile Exchange fell more than 6% in just one day this week.
• StoneX economist Arlan Suderman told the FT. “Perception is reality when it comes to food in the consumers’ eyes, obviously. If they perceive a problem, whether there’s a problem or not, there’s a problem.”

Meanwhile, more than 16,000 pounds of ground beef sold to Walmart was recalled this week because of E. coli contamination.

Don’t Have a Cow, Man: After chicken, beef is the second-most consumed meat in the US at roughly 30 billion pounds per year. But its popularity isn’t as widespread as you would think, with just 12% of the population accounting for half of all beef consumption on a given day, according to a 2023 study published in the journal Nutrients. And most is eaten by older men and teenage boys. So, guys, some red meat can be good for a balanced diet, but you shouldn’t eat the whole cow.