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AI needs regulation - WR #209
Weekly Roundups
April 12, 2024

AI needs regulation - WR #209

In this Weekly Roundup, we’ll go over some news about AI regulation and the importance of fan economy for artists and labels. Let’s take a closer look together!

#1. UK rethinking copyright (again)

We have movement on that front! A UK parliamentary committee is proposing substantial changes to copyright laws to ensure fair remuneration for creators. The recommendations include a review of streaming royalties’ distribution to ensure that songwriters are remunerated fairly. To support their position, the committee has put forward several suggestions:

  • New rules that would require prior consent from rightsholders for their materials to be used in AI training, and that these rights holders be remunerated for this use.
  • The creation of a tax on all copies. This would be impacted on multimedia devices and blank media, from which rightsholders would be paid for the use of their content.
  • The creation of a commissioner position to defend the interests of creative freelancers and any other independent and self-employed workers.

It's been three years since the Committee called for a "music streaming reset" in the UK to address the music industry's challenges, without any result. In the meantime, reactions from stakeholders vary, with some industry players welcoming the initiative, while others believe this could limit investment and stifle British creators.

#2. A new AI-based music creation app supported by a distributor? 

Have you ever heard of Udio, the new AI-based music creation application developed by former Google DeepMind researchers? Launched on April 10, 2024, Udio lets you generate a mastered 40-second track in just a few steps. Simply enter a description of the musical genre you wish to create, provide the subject or personalized lyrics, and indicate the artists who inspire them. Once created, the track can be modified as the user sees fit.

Funded by a number of companies, including music industry players such as UnitedMasters, the DIY distribution platform, Unido had the opportunity to discuss with industry players how we could commercialize this technology in a way that would benefit both artists and musicians. This included feedback from some of our most prolific artists and producers.

While United Master's CEO says they're making sure this transformative technology will only amplify creativity, empower artists and enrich the music industry without compromising ownership by being transparent,  Udio's launch comes amid persistent concerns that AI-generated tools and music could disrupt the music industry's entire business model.

#3. Circling back to the Fan economy in music business

MIDiA revealed that extended rights now account for 10% of the recorded music market, with revenues of $3.5 billion (merch, sponsorship, branding, live, etc.), marking a shift from a consumer economy to a fan economy. Let's take a look at the 3 key elements behind these changes:

1. Image and likeness: The music industry must recognize the importance of artists' image and likeness on social media. Image rights need to be integrated to ensure fair remuneration, and legislation protecting artists' voice and likeness would be necessary in the future.

2. Streaming reconfiguration: Artist subscriptions and personalized profile features for fans are important steps today to give their fans the accessibility to buy products from artists. In addition, several platforms like Spotify and Weverse are focusing on this fan economy.

3. Nurturing fandom: It’s up to record companies to cultivate fans as a scarce resource, not simply monetized. Superfan strategies aim to build and maintain a loyal fan base; this is a long-term involvement.

Music is entering a new era where fandom is taking center stage, and a fan-centric approach is essential to the music industry's future.

#4. Artists rising to protect their work from training AI algorithms

A few days ago, Artists Rights Alliance (ARA), a non-profit organization, shared a list of artists who have signed up to oppose developers who use their music to train AI models. Around 250 artists and songwriters have voiced their disagreement with the unauthorized use of their works by generative AI to train competing models.

Mainstream artists like Billie Eilish, Nicki Minaj, Katy Perry, Billy Porter, Chase and Status, Sam Smith, Jon Bon Jovi and dozens more appear on this list. According to ARA, two major threatening trends are emerging in the AI field: the use of musical works by AI developers without authorization to train and produce AI "copiers", and the use of AI sound to dilute royalty obligations.

The petition raises a number of dissatisfactions from artists and ARA, who are demanding companies and developers to show greater respect for copyright and human creativity.

#5. New tries to regulate AI and copyrighted content

Representative Adam Schiff, a California Democrat, has proposed the bill “Generative AI Copyright Disclosure Act”, requiring companies working on generative AI to publicly disclose the copyrighted sources used.

This legislation would require the submission of a notice detailing all copyrighted works used, within 30 days after the AI system is first made publicly available. It would apply retrospectively to systems already available to the public, and this solution would maintain a certain ethos and protection for creators' works when AI is used.

In addition, the bill has the support of numerous professional groups involved in industries centered on intellectual property, including groups from the music industry. However, the proposed law is likely to be resisted by AI companies, as it would be impossible, or at least extremely costly and inefficient, to catalog every instance of copyrighted content.

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