Rethinking Royalties – Impact of AI on the Music Industry

In a rеcеnt еpisodе of thе MBW Podcast,  MBW foundеr Tim Ingham had an insightful convеrsation with Dеnis Ladеgaillеriе,  thе foundеr and CEO of Bеliеvе,  a prominеnt playеr in thе music industry.  Bеliеvе,  hеadquartеrеd in Paris,  has cеmеntеd its position as onе of thе major playеrs in thе rеcordеd music businеss,  boasting an imprеssivе valuation of approximatеly $1 billion on thе Paris Euronеxt stock еxchangе.  In thе first half of 2023,  thе company rеportеd rеvеnuеs of around $450 million,  all dеnominatеd in Euros. As reported by Xttrawave, the music streaming industry also continues to experience robust growth, driven by the convenience and accessibility it offers to music enthusiasts worldwide.

During the podcast, Ingham and Ladegaillerie delved into several critical topics shaping the music industry today:

AI’s Transformative Potential

Ladegaillerie emphasized the positive role of Artificial Intelligence (AI) in the music industry, stressing that it should be viewed as an opportunity rather than a threat. AI, particularly generative AI, offers avenues for creativity and discovery in music creation. It enhances music composition, voice modulation, and much more. Ladegaillerie believes that AI empowers both established and emerging artists to produce better music and augments music discovery, as evidenced by AI-driven recommendations on platforms like YouTube, TikTok, and Spotify.

Collaborative Approach

Ladegaillerie advocated for collaboration between technology giants like Google, ByteDance, Meta, and the music industry to harness generative AI’s potential. While a comprehensive global copyright framework for AI is still in development, cooperation between industry stakeholders can ensure responsible AI development without jeopardizing artists’ rights.

Superfans and Monetization

Ladegaillerie highlighted the significance of “superfans” and their potential to drive revenue for artists. Superfans seek unique experiences and engagement with artists, such as exclusive meet-and-greets or early access to content. Ladegaillerie suggested that digital platforms could replicate these experiences to monetize superfans and enhance artists’ income.

User-Centric Royalty Model

On the user-centric royalty payout model, Ladegaillerie pointed out that it offers benefits like spreading value across music genres but also has drawbacks, such as favoring global artists and catalogs over local ones. He advocated for adjustments to the model to address these issues and ensure fair compensation for all artists.

Challenges in Defining “Actual Artists”

Discussing industry alignment, Ladegaillerie mentioned that there is consensus on addressing streaming fraud and excluding non-music content from music royalties. However, defining what constitutes an “actual artist” and how to share value fairly remains a contentious issue. Some DSPs proposed not paying royalties to artists with fewer than 1,000 monthly streams, a move Ladegaillerie found concerning, as it could discourage aspiring artists.

Believe’s Success in India

Ladegaillerie shared Believe’s achievements in India, where they’ve become a leading player in digital music services. Their approach of allowing artists to retain copyrights and financially participate in their success has resonated with local talent, transforming the music market.

Believe’s Commitment in Russia and Ukraine

Despite criticism, Believe continues its operations in Russia and Ukraine, focusing on protecting its local teams and adhering to laws while providing support to artists and labels, especially in Ukraine.

Optimism for the Music Industry

Ladegaillerie expressed optimism for the recorded music industry’s growth, citing potential price increases, segmentation, and opportunities in untapped markets. Believe’s expansion plans in the US align with the trend of independent artists achieving success, like the recent rise of DIY-distributed artist Oliver Anthony to the top of the Billboard Hot 100.

Related Articles

Back to top button