Business

Universal Music Pulls Catalog From Triller, Saying App 'Shamefully Withheld' Artist Payments

Triller
Rafael Henrique/SOPA Images/LightRocket via Getty Images

Triller

Triller CEO Mike Lu responds: "This has to be a bad Punk'd episode. I'm waiting for Ashton to jump out of my closet."

UPDATE: This story was updated Feb. 5 at 2 p.m. EST to include an additional statement from Triller.

Universal Music Group (UMG), the world's biggest music company, has pulled its song catalog from video-sharing app Triller, which it says has "shamefully withheld payments" to its artists.

UMG also claims that Triller has cut off negotiations for a new music licensing deal to allow users to play UMG song clips in their videos, after the deal UMG signed with Triller in 2018 presumably ended. A source familiar with the matter says that UMG has been signing short-term renewals for more than a year, and that the payments UMG claims Triller is withholding go back by several months.

"We will not work with platforms that do not value artists," a spokesperson for UMG told Billboard. "Triller has shamefully withheld payments owed to our artists and refuses to negotiate a license going forward. We have no alternative except to remove our music from Triller, effective immediately."

The spokesperson says UMG has sent multiple warnings to Triller.

Reached over email, however, Triller CEO Mike Lu told Billboard that he first learned about UMG's catalog removal in the press this morning.

"This has to be a bad Punk'd episode. I'm waiting for Ashton to jump out of my closet," he said. "Our relationship with UMG is solid. Its biggest artists are investors and partners in Triller and Universal owns part of Triller. We find it hard to believe UMG wouldn’t give us any warning or notice but just tell us via press."

(As a result of Triller's last licensing agreement with UMG, the label is believed to have a minority stake in Triller.)

Later this morning, a spokesperson from Triller said in an additional statement that the company's most recent deal with UMG expired last week, and that it has been negotiating in an attempt to renew since. Triller went on to "categorically deny" that it has withheld payments, and argue that the renewal is "just a formality and a courtesy to UMG."

"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. Triller has no use for a licensing deal with UMG," the statement reads. "We categorically deny we have withheld any artist payments (our deal has only been one week expired) 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. They 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," the statement continues. "UMG is well aware any agreement was just out of respect and courtesy, not necessity. We have been operating without it and there has been no change in our business.”

Triller does, however, need to license publishing and recordings to operate the way it has been, according to standard industry practices and the established interpretations of copyright law. Technically, Triller could try and argue that it is protected by the Digital Millennium Copyright Act’s (DMCA) Section 512 "safe harbor" provision, under which platforms process takedown requests filed by rights holders for any alleged copyright infringement. But for an app which relies on access to a catalog of popular music, licensing deals are seemingly inevitable.

Generally, most artists also cannot independently license their recordings, which are either owned by or licensed to labels. (In some cases, Triller would also need to license rights to compositions from publishers, or songwriters who control their own work.) Shareholders or not, artists can only grant rights to recordings that they own.

It is unclear which "relevant artists" Triller is referring to, and the company declined to comment further.

Triller -- a TikTok competitor which was founded in 2015 and is majority-owned by Hollywood dealmaker Ryan Kavanaugh's media investment firm Proxima Media as of 2019 -- has long billed itself as a partner to the music industry, and had licensing agreements with UMG, Sony Music Entertainment and Warner Music Group as of December. But this isn't the first time Triller has run into copyright trouble. In November, Wixen Music Publishing filed a $50 million copyright lawsuit against Triller, alleging copyright infringement on more than 1,000 songs, and the NMPA has also accused Triller of using music without the proper licenses.

Meanwhile, in November Proxima Media hired Tuhin Roy, UMG's former senior vp of new digital business and innovation, to lead Triller's business operations and help shepherd the company through its forthcoming initial public offering (IPO), which is expected in the first quarter of 2021, according to a source familiar with the matter.

Triller has reportedly been shelling out funds to lure top influencers over to its platform, gifting luxury cars and mansion rentals to social media stars like Charli D’Amelio and Bryce Hall. The platform recently paid north of $50 million for exclusive streaming rights to the Mike Tyson-Roy Jones Jr. fight in November, according to CNBC. It reportedly scrapped plans to run an ad during the Super Bowl this weekend, where a 30-second spot runs an estimated $5.5 million, choosing to instead partner with the app VersusGame and Maxim to give away $1 million to one fan in a predictions-based game which Murda Beatz (who is signed to UMG through Interscope Records) is co-hosting live on Triller.

Triller claims to have 250 million global downloads, although it has been accused of inflating its user numbers.