June 14, 2024

Pierreloti Chelsea

Latest technological developments

UMG: Triller ‘Removed From Reality’ in Claims About Licensing Deal

The war of words between Ryan Kavanaugh’s Triller and Universal Music Group escalated Friday, after UMG pulled its catalog from the video-sharing app citing Triller’s failure to pay licensing fees for songs used on its service.

Early Friday, Universal Music said it was removing its music from Triller — which positions itself as a rival to popular social-video app TikTok — because, “Triller has shamefully withheld payments owed to our artists and refuses to negotiate a license going forward.”

“We will not work with platforms that do not value artists,” the music giant said.

Triller was blindsided. In its initial response, CEO Mike Lu said, “We find it hard to believe UMG wouldn’t give us any warning or notice but just tell us via press.”

In a subsequent statement, Triller assumed a new posture: The company said it does not believe it needs to re-sign a licensing deal with Universal Music and accused UMG of trying to hold it “hostage.”

Triller previously had a licensing deal in place with UMG, which expired at the end of 2020. Universal Music had temporarily extended the pact into the new year — until it became clear that Triller had no intention of actually renewing it.

“Triller does not need a deal with UMG to continue operating as it has been since the relevant artists are already shareholders or partners on Triller, and thus can authorize their usage directly,” a rep for the L.A.-based company said in a statement to Variety. “Triller has no use for a licensing deal with UMG.”

Triller’s statement continued, “We categorically deny we have withheld any artist payments… and if anything, it is UMG using their artist names as a front to extract ridiculous and non-sustainable payments for themselves and not their artists.” Triller asserted that UMG “did this exact same thing to TikTok for two years and virtually every other social network.”

“It is unfortunate UMG decided to use the press as its ‘negotiating leverage’ when they realized we aren’t going to be held hostage. UMG is well aware any agreement was just out of respect and courtesy, not necessity,” Triller’s rep concluded. “We have been operating without it and there has been no change in our business.”

Asked for comment, a UMG rep said in an emailed statement simply, “Triller’s statements are ‘removed from reality.’”

Many in the industry are incredulous at Triller’s stance that it doesn’t need to pay music companies for the rights to use their recordings — especially as the platform’s core function relies on an enormous music library that users can access. “It’s sad to see Triller join the long list of tech companies that talk big about music but fail to deliver for artists, songwriters and fans,” the Artist Rights Alliance said in a statement. “We strongly support the ongoing fight for fair treatment for music creators and an online world in which all music is licensed and paid for.”

It’s unclear how many active users Triller currently has. Last fall, it touted upwards of 100 million monthly active users, but former employees and industry researchers have cast doubt on its claims.

In 2019, Proxima Media, owned by Kavanaugh (former head of twice-bankrupt studio Relativity Media) bought a controlling stake in Triller. The company has raised $33 million to date from investors including Proxima and Pegasus Tech Ventures, according to Crunchbase.

The big three music companies — UMG, Sony Music Entertainment and Warner Music Group — each own a small stake in Triller, the Wall Street Journal has reported. Any ownership stake is irrelevant, however, to whether Triller is legally required to pay licensing fees for music on its app.

What happens next in the Triller-UMG spat is up in the air. Under its previous contract, Triller owes several months’ payments to Universal Music for usage on the app. In addition, now that it’s out of contract, UMG will require Triller remove content from its platform that includes music from its catalog.