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The Music Industry Through The AI Looking Glass

Updated: May 10

This week’s announcement of a partnership between Universal Music Group and Endel may have raised eyebrows in some quarters. The deal allows UMG artists to create “soundscapes” with new music, or from existing repertoire in their catalogue, to “enhance listeners’ wellness”. The self same “soundscapes” that UMG in particular have vociferously criticised, both within the industry and to their shareholders.


Robert Kyncl, Warner Music Group’s new CEO, echoed the same sentiment on WMG’s recent earnings call, saying that “It can’t be that an Ed Sheeran stream is worth exactly the same as a stream of rain falling on the roof”. This week, it was Sony Music Entertainment chairman Rob Stringer’s turn “We are convinced that consumers want the same quality and remain concerned that DSPs are watered down by low quality and meaningless volume which negatively impacts music fans and real artists”.


Functional playlists, for example - such as white noise or rainfall (often used to aid sleep or mindfulness) - have been cited by all 3 majors as “low quality and meaningless”. Why then, do UMG appear to want to add to the volume of “non-premium” streams available on streaming services?


There are a number of angles:


  • UMG very publicly asked their DSP partners earlier this year to ensure that their APIs were not being used to train AI machine learning models on UMG repertoire. That request should have come from the wider industry and baked into consequent DSP licensing agreements at least 5 years ago, while it still had a chance of being effective.

  • A matter of days after this request was publicised, we got “fake Drake”. Illustrating the relative slothfulness of the music industry, yet again.

  • The potential shareholder freakout from “fake Drake” required a public announcement of reassurance that as market leader, everything was in hand and look, we’re in a legit commercial partnership with an AI company, so we’re all good. They had to be seen to be doing something.


Perhaps this announcement is UMG focusing on the opportunities that come with legitimate, legal, licensed and approved collaborations using AI. And will this complement UMG’s recently announced partnerships with Deezer and TIDAL to explore more “artist-centric” models for streaming?


As yet though, the music industry at large hasn’t worked out how to cope with the challenges that this technology poses to their very existence.


The whack-a-mole process of having “fake Drake” taken down from established streaming platforms got the focus amidst much hand-wringing and online debate as to what exactly this all means. But we need a far more nuanced, educated and engaged conversation this time. The dam has burst. We can’t litigate this away.

To wit - a casual search online (of precisely 10 minutes) unearths all manner of strange ‘AI covers’, obviously some more credible sounding than others. Interesting to note that monetisation is enabled on YouTube on some of these, and (unsurprisingly) the attributed metadata on some is wrong (where present) - meaning ad revenue from these videos is not going to the rightful artists or rights holders.


Seriously, grab yourself a drink and settle down as you’ll be in this rabbit hole for a while. Our 10 minute search focussed on some of the biggest recording artists of the modern era and found:

Ariane Grande ‘covering’ Adele’s Easy On Me; Adele doing Whitney’s I Have Nothing; John Lennon tackling Space Oddity: Madonna duetting with Red Hot Chilli Peppers on By The Way; Michael Jackson covering Queen’s Killer Queen; and Freddie’s turn at Abba’s The Winner Takes It All.


It’s a fun game, requiring only the names of two random artists in the search field and hey presto! (Results may vary).


Seriously though, it’s going to take a minute to organise and come up with something that commercially, creatively, legally and constructively recognises the opportunities that AI brings, whilst also respecting the wishes of artists and rightsholders.

But let’s look beyond the wider artistic, cultural, ethical, legal or financial considerations bound up in this tech. What are the potential impacts of AI technology on the business side of the industry - how will the current corporate landscape, the long-established processes and people that currently make their living from working in the music industry, evolve over time?


We’re looking squarely into the mirror at ourselves and our collective day-to-day work within the industry.

Blockchain already provides significant capacity to transform efficiency in areas such as Supply Chain, Finance, Royalties and Legal. In Supply Chain, for example, AI can add further layers of value to streamline stock control, order physical goods and forecast product manufacturing runs for maximum ROI and real-time price point management.

On the Creative side, data has been increasingly mined over the last ten years to alert A&R teams to trending artists and tracks. AI could provide much richer context to those flags, more quickly and potentially even identify hot new music way before those teams would initially start smelling a hit. Would those teams in their current formation even be required at that point?

Similarly in Marketing, much has changed over the last ten years and it has necessarily become more data-driven, primarily because there’s more data now to interpret and act upon. AI is already assisting in spotting patterns and getting the right message to the right person, at the right time and in the right place. Further automation on this front is inevitable.


Artist / Writer Development is one area that may be more resilient against “the march of the machines”. Creative Development, of course, over the last 10-15 years has almost completely transferred over to an artist management function as opposed to a label or publishing mainstay. Witness the universal (note small u) over-reliance on TikTok and the current norm for signing track deals - where have the 6-album deals gone? As an industry, we’ve become obsessed with feeding the beast but literally cannot see beyond the next viral hit. Short-termism in the music industry is hardly a new thing, but this time, it’s potentially existential.


It’s no coincidence that artist management is almost unrecognisable from 10-15 years ago. Most forward-looking managers have already built their own creative and business teams in-house, not only as they now need to have the building blocks in place for their artists well in advance of signing deals, but also to ensure that they hold labels, publishers and others accountable once those deals are in place.


So if artist managers (and indeed some artist and writers themselves) are building their own infrastructure, what do they actually need labels for? AI will change the corporate structure of the music industry, and the efficiencies that it will bring will utterly transform how it looks today.


None of this addresses why UMG now appear to be embracing so-called “non-premium” streaming after railing against it for so long, at the most senior level. But it does, however, signal a critical change in tone from the market leader, which will of course have reverberations throughout the industry.

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