Turning Point: Could This Deal Reshape the Entire Music Industry?
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The lawsuit brought by major players in the music business—Warner, Sony, and Universal—against AI music start-ups such as Suno and Udio has been ongoing for a considerable time. It is possible that an out-of-court settlement could be reached. This could have a massive impact on the music market worldwide.
We all know that Sony, Universal, and Warner are broadly dividing up the gigantic music pie between them. Acts such as Taylor Swift, The Weekn,d and Drake rake in billions of views on Spotify. At the same time, it is becoming increasingly complex for lesser-known and/or independent artists to achieve music sales or streaming figures that are even remotely relevant. AI may intensify this distribution competition in the future, depending on what the three music giants negotiate.
Will there be a surprising agreement with Suno and Co.?
At least it's not unlikely that something will happen if you read the Bloomberg report. According to the report, the big three have agreed with the AI companies Suno and Udio to negotiate out of court and, at best, to reach an agreement outside the courtroom.
What is at stake? AI start-ups such as Suno and Udio make it possible to create music on demand. So, do you want a song that combines sirtaki and metalcore, but with a catchy, poppy twist? No problem for the AI models of the two companies mentioned. In order for this to work so well, the industry accuses these start-ups of using copyrighted songs. Because, of course, just like ChatGPT with texts or Midjourney with images, these music platforms also have to be trained with infinitely large data sets.
According to Bloomberg, the lawsuit filed by the Recording Industry Association of America (RIAA) - the US music industry association - is still ongoing. Nevertheless, a model is now to be developed independently of this with Suno and Udio, according to which the music tracks can be legally used for training. In practice, this would mean that these two AI companies would pay license fees to Sony, Warner, and Universal, at least according to the sources cited by Bloomberg. There is also talk of the three companies insisting on a stake in Suno and Udio.
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How expensive will it be for Suno and Udio?
It is clear that the AI companies will have to dig deep into their pockets if they can agree on a licensing model with the industry. After all, the RIAA is demanding up to $ 150,000 per song used to train the AIs. Suno and Udio refer to the fair use case, which they believe applies in this case. If they are nevertheless now engaging in out-of-court negotiations, this at least gives the impression that they are not one hundred percent convinced of the fair use story, or that they are intimidated by a huge industry with its army of lawyers.
It is impossible to say how the case will end. However, it is clear that Warner, Universal, and Sony desire greater control and transparency, whereas Suno and Udio advocate for a more flexible approach. GEMA in Germany and other European collecting societies have also taken legal action, which makes the upcoming negotiations even more exciting.
I have enough imagination to think of all kinds of implications of such a deal. Some of them are so drastic that the music market could be turned completely inside out. There are also fears that the gap between superstars and small artists will widen. Let me know in the comments if you're interested in this topic, because I have a few thoughts I'd like to share with you.
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