A new report suggests Elon Musk’s cost-cutting measures at Twitter have impacted music licensing talks.
Elon Musk’s takeover of Twitter in October 2022 has caused chaos for employees and business partners. In December 2022, the platform was sued for a failure to pay a $1 million invoice for a software contract that doesn’t expire until 2024. The lawsuit alleges that the now Musk-led Twitter intends to stiff the company on more than $7 million in future payments.
“Shortly after Musk’s purchase of Twitter closed, Twitter refused to pay the outstanding quarterly invoice, which was due on November 30, 2022,” the lawsuit alleges. “Twitter disclaimed any obligation to pay any future invoices from Imply, despite the unambiguous language in the software license and service agreement requiring Twitter to do so.”
Now The New York Times reports that music licensing rights for Twitter with the Big Three labels (UMG, WMG, Sony) have also stalled under Musk’s leadership.
Twitter started negotiations with the major three labels in the fall of 2021, according to six people who spoke with the NYT. After the deal closed in October 2022, the talks continued as Musk flirted with the idea of resurrecting Vine—the short-form platform that Twitter shut down in 2016 after buying it in 2012.
“The internal chaos at Twitter after Mr. Musk’s takeover disrupted the negotiations,” the New York Times reports. “The company eliminated some of the people responsible for the music rights talks in several rounds of layoffs, leaving the labels with few remaining Twitter contacts,” the report continues. The New York Times verified the talks with at least four people who work at major music companies.
It should be no surprise that these talks have fallen apart after Musk’s takeover, as the chaos continues. Twitter has not paid rent for its San Francisco office or any of its global headquarters for weeks, the Times reported earlier. Others report that Twitter’s leadership continues to discuss the consequences of denying severance packages to former employees.