Welcome to Music Business Worldwide’s weekly round-up – where we make sure you caught the five biggest stories to hit our headlines over the past seven days. MBW’s round-up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximize their income and reduce their touring costs.
In a not entirely unexpected move, this week the three music majors – Sony, Universal, and Warner – launched lawsuits against AI music generators Suno and Udio. The move marks the first major attempt by recording companies to gain redressal for the alleged unpermitted use of copyrighted songs to train AI.
And while AI tools that can create complete songs in seconds are a clear threat to music rightsholders, this week we learned of another potential threat: A possible decline in demand for music streaming services. A YouGov poll in Sweden found fewer people in Spotify‘s home country are paying for music streaming today than two years ago.
In other news this week, we learned that Believe chief Denis Ladegaillerie – who is part of the consortium that recently acquired 95% of the France-based digital music company – is eyeing a “transformative” acquisition, possibly a music publisher, to add to Believe’s ecosystem of businesses.
We also learned that the record label, distribution company and entertainment network Create Music Group raised $165 million in a funding round that implies it’s valued at $1 billion, making the nine-year-old company a bona fide unicorn.
Finally, a news report this week stated that YouTube is in talks with Sony, Universal and Warner to license music to train new AI technologies.
Here’s what happened this week…
1) HOW THE MAJOR LABELS PLAN TO COST SUNO AND UDIO BILLIONS (AND WHY IT ALL RESTS ON MICHAEL BUBLÉ)
The lawsuits that the major recording companies filed on Monday (June 24) against AI music companies Suno and Udio leave little doubt that the music industry sees these types of AI tools as an existential threat.
The two companies’ “unauthorized use of… copyrighted recordings threatens to eliminate the existing market for licensing sound recordings,” the lawsuits state, “as well as the future market for licensing sound recordings to generative AI companies.”
In other words, these technologies – which allow users to create songs in seconds with nothing more than a text prompt – could bring down the entire music industry.
For the major music rightsholders behind the suits, failure is not an option…
2) A WARNING SIGN? SWEDEN HAS FEWER PAYING MUSIC SUBSCRIBERS THAN IT DID 2 YEARS AGO, ACCORDING TO YOUGOV SURVEY
The recorded music industry is bullish on increasing the prices of premium streaming services in key markets.
However, a new survey from a traditionally important streaming market, Sweden, may give the wider music industry some pause for thought.
According to a YouGov survey, 56% of people in Sweden now pay for a premium subscription – either directly or via a bundle.
That figure was down vs. the 59% of respondents in Sweden who said they paid for a premium music subscription in 2022…
3) DENIS LADEGAILLERIE HAS BELIEVE BACK IN HIS ARMS – AND HE’S EYEING A HUGE ACQUISITION
Prediction: the recorded music industry is likely to see at least one $1 billion-plus acquisition of a distribution and services player over the next 12-24 months.
Surprise: the company behind said acquisition could well be Believe.
That’s according to Believe founder and CEO, Denis Ladegaillerie, speaking exclusively to Music Business Worldwide.
Ladegaillerie picked up the phone to MBW earlier today following the news that his consortium – which Ladegaillerie jointly owns with EQT and TCV – now owns 95% of Believe via a recent share tender process…
4) CREATE MUSIC GROUP, AT $1 BILLION VALUATION, RAISES $165 MILLION INVESTMENT ROUND
Create Music Group has secured a USD $165 million minority investment round led by private equity firm Flexpoint Ford, MBW can reveal.
Unicorn alert! The investment round values Los Angeles-HQ’d Create at $1 billion, a spokesperson confirmed.
Music industry veteran Charles Goldstuck also joined the funding round, which is understood to see the Flexpoint-led group acquire close to a fifth of Create’s equity.
Create says it will use the money to fuel further global expansion and execute an “ambitious acquisition strategy”…
5) YOUTUBE IN TALKS WITH SONY, UNIVERSAL, WARNER TO LICENSE MUSIC FOR AI TOOLS (REPORT)
Google’s YouTube is in talks with the three music majors – Sony, Universal, and Warner – to license their music to train AI tools that will clone popular artists’ music, according to a report in the Financial Times.
YouTube wants to offer cash upfront in lump-sum payments to gain the rights to specific artists’ music – with the permission of the artists themselves.
The idea is to encourage more artists to allow their work to be used to create AI music tools. YouTube wants “dozens” of artists to participate, two of the people familiar with the matter told FT.
YouTube’s initial efforts at working with artists on AI tools appear to have fallen short of expectations: Only 10 artists agreed to participate in the training of Dream Track, a tool meant to bring AI-generated music to YouTube Shorts, the video platform’s competitor to TikTok…
MBW’s Weekly Round-Up is supported by Centtrip, which helps over 500 of the world’s best-selling artists maximise their income and reduce their touring costs.Music Business Worldwide
