Triller confirms owing Sony $2M, vows to pay less for music [Read their full statement]

In August, Sony Music Entertainment (SME) sued short video platform Triller for non-payment and, earlier this month, removed all music from Sony, UMG, WMG and indie licensor Merlin.

“We have a dispute with Sony over 2 million dollars,” Triller said in its statement, “a dispute which will be decided in the court system.”

Triller denies any wrongdoing despite its $2 million debt to Sony and is vowing to pay artists and labels based only on usage rather than its current multi-million dollar flat payments.

That Triller is paying too much for music is at the core of its argument:

“We actively have removed a portion of major label music as our deals come up and are assessing each renewal as they come up, each on a case-by-case basis. It has not changed our app usage at all. The numbers speak for themselves.”

That changing patterns of music use are unlikely to be a legal justification for not meeting current payment obligations seems lost on the startup as it works to shore up its reputation and balance sheet before going public.

“As we approach being a public company, this move saves triller tens of millions of dollars per year, without taking away anything from the user experience or hurting our numbers,” claims Triller. “Quite the opposite it increases our bottom line by 30 plus million dollars per year.”

Early this year, Triller announced plans to go public through a merger with SeaChange International, a video services software provider that already trades on NASDAQ under the symbol SEAC.

Triller’s effort to pay less for music hinges on converting its deals with rightsholders as they expire to a Spotify-like revenue share model. “This model would give our users the flexibility to have the music if they chose, outside of OG Sounds, without us paying for music the majority of users don’t use,” says Triller.

It is unclear that the major labels and rightsholders – flush with cash from other sources and in the midst of a much more important negotiation with TikTok over music – will bend to Triller’s demands.

Despite Triller’s claims. it seems likely that limited access to music would make the platform much less attractive for creators.

Full Triller Statement

Here is the full statement from Triller, first reported by Billboard:

“The accusation that we are taking down music because of millions of unpaid royalties is simply not true. We have current active agreements with universal and warner music which is more than 65 percent of the used popular music. We are hopeful and optimistic that when these deals expire, we can come to arrangements that do not involve tens of millions in annual payments rather a revenue split.

As to Triller taking down music in general, we can confirm we assessed the app usage, and a very small percentage of our users use the major label music as most of our users enjoy to make their own content with OG sounds and to upload on their own.

Most of Merlin’s music is indie rock and dance; both genres which has a lower interest on the triller app. It, therefore, makes no sense for Triller to continue spending tens of millions of dollars a year for music virtually no one uses on Triller. 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.

We actively have removed a portion of major label music as our deals come up and are assessing each renewal as they come up, each on a case-by-case basis. It has not changed our app usage at all. The numbers speak for themselves.

Ae we approach being a public company, this move saves triller tens of millions of dollars per year without taking away anything from the user experience or hurting our numbers. Quite the opposite it increases our bottom line by 30 plus million dollars per year.

We are assessing a “Spotify-like model”, which would include a revenue share versus large cash payments as our agreements come up for renewal.

This model would give our users the flexibility to have the music if they chose, outside of OG Sounds, without us paying for music the majority of users don’t use. Sans that our users have made clear the value of this music does not justify the tens of millions a year in cost.

Most important Triller is a platform for creators and focused on helping creators maximize awareness, engagement, and monetization. Our platform is addressing the systemic problems in the creator economy, where creators rarely get their fair share.

Our approach and value proposition is not business-as-usual. We strive to work with all players in the creator ecosystem with fair and transparent economics, which certainly upsets the Apple cart of those who are part of the current ecosystem. This is not the first label we will have to battle with, given the way the current model works, and certainly not the last. Big change causes big ripples.

We are confident at we are on the right side of history.”

MORE: Triller pulls most music catalogs, making it unusable for many creators

Bruce Houghton is the Founder and Editor of Hypebot and MusicThinkTank, a Senior Advisor at Bandsintown, President of the Skyline Artists Agency, and a professor for the Berklee College Of Music.