Universal and Spotify: a brilliant move

If you have read me over the past year, you will have seen me say that AI represents a brutal threat to musicians' income. Big tech companies use hundreds of thousands of catalogs to train their models without asking permission. With that, they are able to generate works that compete directly with human artists for streaming royalties. It is a massive transfer of value from the creative industry to the tech industry.

CISAC, the International Confederation of Societies of Authors and Composers, estimates that musicians will lose around 24% of their income by 2028.

There have been lawsuits, isolated cases where institutions tried to stop the major owners of AI models. From my point of view, it is like trying to stop the rain with your hands. The speed of Big Tech and their influence on the global economy are unmatched. Honestly, I do not see a viable solution to that.

But Spotify and Universal made a brilliant move that has the potential to tip the scales from another angle.

The deal

Universal, which dominates approximately 30% of the global recorded music market, agreed with Spotify on an opt-in system where the label's artists can choose to grant the right for their songs to be used to create AI-generated covers and remixes. Instead of continuing to fight a losing battle, they built a model where AI creation is legal, consensual, and compensated.

• The fan can do it by paying an extra fee on top of their Premium subscription.
• The artist and Universal get paid for that right.
• Spotify adds a new revenue layer per subscriber that did not exist before.

It is worth noting that UMG controls the sound recording rights, meaning the masters, but a song also has a second layer: the composition rights, which are administered by collective management organizations. How the deal articulates with that layer is a question still unanswered.

A brilliant move

In chess, a move is qualified as brilliant when a player makes a move that did not seem possible but is, and is also the best among all alternatives. A move that changes the dynamics of the game.

The reality is that for now it only applies to Universal artists since neither Sony nor Warner have signed yet. Therefore, the game is still to be defined.

In other posts I have talked about soulless content, about the excess of AI-generated art that could turn everything we consume gray. Maybe I am right, although I hope not. What is certain is that this deal looks like a brilliant move, and only time will be able to refute or validate it.