Twitter didn’t move forward with the music licensing deals because of costs, people with knowledge of the matter said.
Twitter explored the licensing of music rights from three major labels before negotiations stalled after Elon Musk’s takeover of the company, said eight people with knowledge of the discussions, who were not authorized to speak publicly.
Twitter is one of the last big social media platforms without music licensing deals, which allow the sites to host virtually all commercially available audio content without fear of takedowns or legal reprisal. Facebook, Instagram and TikTok have all made agreements for music rights.
Twitter had avoided signing deals for music rights, which require social media companies to compensate rights holders when users post or play content with song. The costs of the licenses can vary, but can be well over $100 million a year for established social-media platforms. Twitter has forgone the licensing deals because of the costs, five former employees said.
Twitter and Mr. Musk did not respond to an email request for comment.
Twitter began negotiations with the three major music conglomerates — Universal, Sony and Warner — in the fall of 2021, according to six people close to the talks. When Mr. Musk announced his intent to buy the company last April, some music industry leaders saw his involvement as an opportunity to finally get the deals done.
“Twitter uses a significant amount of music but unlike all other mainstream social media platforms has refused to license that music or compensate songwriters,” David Israelite, the chief executive of the National Music Publishers’ Association, a trade group, tweeted at Mr. Musk that month. “Please help.”
For the music companies, licensing agreements with Twitter would not only represent an additional source of revenue but also resolve longstanding problems of copyright infringement on the platform.
After Mr. Musk bought Twitter in October for $44 billion, talks continued as he flirted with the idea of challenging TikTok and resurrecting Vine, a once-popular short-video app that Twitter had bought in 2012 but shut down in 2016.
Mr. Musk’s team was intrigued by the idea of adding music to the platform, and his personal lawyer, Alex Spiro, who has also represented artists including Jay-Z and Megan Thee Stallion, held meetings to understand the status of the label negotiations and assess the costs, four people familiar with the internal discussions said.
Mr. Spiro, who oversaw Twitter’s legal portfolio during Mr. Musk’s acquisition, left the company in December. He successfully defended Mr. Musk in a Tesla shareholder lawsuit this year.
The internal chaos at Twitter after Mr. Musk’s takeover disrupted the negotiations, six people said. 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, said four people at the major music companies who were briefed on the discussions.
Mr. Musk’s team has also cut hundreds of millions of dollars in expenditures at Twitter — missing office rent payments, shortchanging software vendors and eliminating a data center — while requiring that every financial outlay be justified under new budgets. With those mandates, two people said, the company had little means to justify paying tens of millions of dollars to music rights holders.
