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Exploring Music industry Updates: from AI to Music Publishing Catalog Acquisitions - WR #162
Weekly Roundups
May 19, 2023

Exploring Music industry Updates: from AI to Music Publishing Catalog Acquisitions - WR #162

This week, we delve into the latest captivating advancements and regarding developments in the field of AI. Our discussion will also encompass TikTok's growing influence in the music industry, ongoing copyright infringement lawsuits, major music revenues, and noteworthy music publishing catalog acquisitions. With a wealth of topics to explore, let's dive right in.

#1. AI Latest Advancements and Challenges

Regarding AI powers in global communication and translation, the South Korean entertainment giant HYBE has released a multilingual single titled "Masquerade" by the artist MIDNATT, aiming at “delivering a transcendent K-pop experience to global music fans.” This is the first song made in Korean, English, Japanese, Chinese, Spanish and Vietnamese, thanks to AI. HYBE acquired and used Supertone, a voice AI company for this project, which can improve pronunciation and intonation using native data.

In the meantime, Google has expanded access to its MusicLM text-to-music generator. Users can now join a waitlist to try out this AI tool on the web, iOS, and Android through the AI Test Kitchen. However, MusicLM has limitations and cannot generate music resembling specific artists, vocals, or classical music.

Despite these two pieces of news, OpenAI's CEO himself, Sam Altman, will testify before Congress, urging for AI regulation. Altman proposes licensing for AI developers and a flexible governance approach that balances safety and accessibility.

To conclude updates on AI, Major music labels, including UMG, WMG, and Sony Music, are in discussions with streaming platforms like Spotify, Apple Music, and Amazon Music to establish an AI 'takedown notice' system. This voluntary agreement aims to remove recordings that use AI-generated vocals imitating popular artists. The focus is on violations of publicity rights rather than copyright. Labels issuing takedown notices is seen as a straightforward solution, contrasting with Audius' opt-in approach to AI-generated works.

#2. Is TikTok redefining Music Labels Roles?

TikTok is making moves in the music industry by quietly securing distribution deals with artists, a development that could disrupt the traditional role of record labels. The popular social media platform has reportedly been seeking exclusive agreements with various musicians to distribute their work through its one-year-old service, SoundOn.

These custom deals resemble the arrangements typically made by major record labels. In addition, this recent initiative by TikTok indicates a shift towards including more established artists in addition to its focus on emerging talents, particularly those who have already gained recognition through viral TikTok videos.

While TikTok's parent company, ByteDance, denies aspiring to be a music label and the challenges that come with it, their recent actions could have a profound influence on the music industry.

#3. Spinrilla loses $50 Million in Copyright Infringement Lawsuit

Spinrilla, a popular site for creating hip-hop mixtapes, has been ordered by US District Court to shut down and pay $50 million in a copyright infringement case. The lawsuit, filed by major record labels, accused Spinrilla of hosting a significant amount of copyrighted content without authorization.

The judgment also prohibits Spinrilla's employees and associates from operating similar services in the future. Despite Spinrilla having previously claimed cooperation with record labels to prevent unauthorized music uploads, it finally failed to meet the requirements for safe harbor protection under the Digital Millennium Copyright Act.

The case reflects similarities to previous battles between music platforms and major labels, such as Grooveshark and Aurous, which resulted in site closures and financial penalties.

#4. How much do Major Music Companies Generate Per Hour?

Universal Music Group, Sony Music Group, and Warner Music Group, the three major music companies, collectively generated around $2.9 million per hour, according to recent calculations. Based on their Q1 results, the majors generated approximately $6.21 billion USD in revenue across their music rights operations, including recorded music, music publishing, and ancillary revenues.

In terms of recorded music alone, they earned $5.00 billion, while recorded music streaming revenues accounted for $3.32 billion. Although the majors' year-on-year revenue growth remains healthy, it is not as substantial as in previous years. With the strong performance in Q1, there is a possibility of surpassing $25 billion in annual revenue for 2023 collectively.

#5. Iconoclast Acquires Dave Taylor's Music Publishing Catalog

Olivier Chastan's acquisition company, Iconoclast, has made another purchase acquiring the music publishing catalog of British songwriter and producer Dave Taylor, known as Switch. Switch, co-founder of Major Lazer with Diplo, has collaborated with renowned artists such as M.I.A. and Beyoncé. The catalog includes hit songs like "Run The World" by Beyoncé and "Pon The Floor" and "Get Free" by Major Lazer. Iconoclast claimed to aim at preserving and growing the intellectual property of culturally significant artists, so much so that it has a history of acquiring catalogs from notable artists.

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