On Thursday (January 5), UMG filed a lawsuit against the US-based TikTok rival claiming that it has not paid licensing fees for the past three quarters.
The suit also reportedly claims that the company hasn’t provided quarterly usage reports outlining the use of the major’s music on the Triller app.
This news was reported by Variety, which reports that UMG says in its complaint that it has also terminated its agreement with Triller.
As per Variety’s report, the complaint alleges that Triller agreed to pay nearly $3 million to Universal for licensing and past use of its catalog, and that these payments were supposed to be made in quarterly installments over the course of two years.
Triller has missed the last three payments, according to the complaint.
In the weeks leading up to the signing of that agreement, Universal had accused Triller of having “shamefully withheld payments owed to our artists” as well as “refus[ing] to negotiate a license going forward”.
Today’s news also comes three months after Triller confirmed that it had secured a binding USD $310 million investment from GEM (Global Emerging Markets), a Luxembourg-based alternative investment group.
Confirming the deal, Triller said that it expected to execute a public listing on the stock exchange in Q4 2022. That public listing didn’t arrive in Q4. Triller also claimed at the time that it was on track to clear $100 million in revenue in 2022.
That June announcement itself came shortly after Triller announced it was scrapping another planned IPO – this time via a merger with Seachange – which was initially expected to “close in Q1 2022”.
In a formal response to SME’s complaint filed in December, Triller confirmed that it has been unable to issue payments to SME due to a range of reasons.
“Triller admits that it has not made payments to [SME] since March of 2022 and that [SME] notified Triller on July 22, 2022 that Triller was in breach of the agreement,” the company said in its response, filed on December 5, and seen by MBW.
SME accused Triller of going on a purchasing spree at the time when no payments were made and highlighted some of Triller’s acquisition deals around the time it failed to pay licensing fees.
The acquisitions include its purchase of influencer marketing software platform Julius on March 28, and the April 25 purchase of Fangage, a platform for creators to host and sell content to their fans.
Triller’s acquisition spend is also reportedly referenced in the complaint filed by Universal this week.
According to the lawsuit, “During the same time period that Triller was defaulting on its payment and reporting obligations, it was reported that Triller was spending substantial amounts of money acquiring companies”.
Universal’s legal action against Triller follows last month’s news that the platform had removed the catalog of music licensed by Merlin, which represents prominent independent labels and distributors.
In a statement issued to MBW on December 2, a Triller spokesperson confirmed, “that we are taking down Merlin music”, but claimed, that “of the three major labels, Sony is the only one we do not have a current agreement with and haven’t renewed”.
“We have a dispute with Sony over 2 million dollars, a dispute which will be decided in the court system,” they added.
Triller also said last month that it is exploring revenue share deals with major labels.
According to a Triller spokesperson, the platform is currently “assessing” what it calls a “Spotify-like model”, which, they add, would include “a revenue share versus large cash payments as our agreements come up for renewal”.
In a statement issued to Variety, a Triller spokesperson called the new legal action brought by Universal “nothing more than a minor contractual dispute with a publisher, not the label, and has no impact whatsoever on triller or its business”.
It added: “This is a dispute about publishing for a very small percentage of the catalogue, and is the ordinary course of business for the music industry and over a small amount of money.
“This will be decided upon in a proper venue in a few years, and we clearly believe we are in the right and that a court will find in our favor. It’s a plain vanilla case that virtually every social network has faced in one form or another. It’s not the first and won’t be the last but similar to the past disputes of [this] nature they tend to settle quietly and end up being a lot to do about nothing.”
Music Business Worldwide