AI-Generated Music and The Ethics of New Music Revenue Streams

The music industry is rapidly transforming, driven by advancing technologies and the challenges of music data management. With the immense popularity of AI-generated music, the music industry faces unprecedented challenges and complex ethical concerns. This article explores the ethics of new music revenue streams, drawing on insights from the panel discussion "Are We Prepared: The Ethics of New Revenue Streams" at MusicBiz 2024, featuring Edward Ginis, Co-Founder at OpenPlay, Muhammad Qasim, CIO at SESAC Music Group, and moderator Russell Karp, SVP at DataArt Media & Entertainment.

Is the Music Industry Ready for the Impact of AI?

AI has truly revolutionized the music industry, with the generative AI music market valued at $294.5 million in 2023 and projected to reach $3.4213 billion by 2033. The increasing popularity of AI-generated music has sparked discussions on how prepared music companies are to navigate the AI revolution. The industry’s historical resilience in adapting to new technologies (such as digital streaming) is now under scrutiny as emerging AI technologies present unique challenges and opportunities. One question remains – are we ready?

"AI does present a very unique challenge. It's unique in the sense that it's the first challenge of its kind that we are facing... Are we ready right now? No. Are we getting there? Yeah, we will probably get there." - Muhammad Qasim, CIO at SESAC Music Group

Ethical Considerations and Intellectual Property

A pressing ethical concern surrounding the use of AI is related to intellectual property (IP) and ensuring fair compensation for IP holders. This concern is amplified by the challenge of tracking and attributing the use of IP in AI-generated music, compounded by the advanced state of current technologies. Today, anyone with Internet access is just one click away from creating AI-generated music with the help of widely available tools, often trained on copyrighted content.

"The key point is that whoever wants to use AI, we want to make sure that the intellectual property holders are compensated fairly for however AI ends up using them." - Muhammad Qasim, CIO at SESAC Music Group

To be effective, ethical measures need to keep pace with technological advancements, ever-changing legal standards, emerging regulations, and the dynamic nature of the music industry. An ideal ethical framework for the convergence of music and AI must be adaptable to address a broad spectrum of applications and the constantly evolving technological, legal, economic, and societal landscapes.

Maintaining the intricate balance between protecting IP and embracing new technologies is essential. This balance is crucial to safeguarding creators' rights, fostering innovation, and growth of new revenue streams in the industry.

New Music Revenue Streams: Opportunities and Challenges

Apart from ethical concerns, AI’s potential to generate new revenue streams is notable. Advanced technologies can create efficiencies in back-office operations, closing gaps in existing revenue streams through enhanced data analysis and integration. Leveraging powerful AI tools that do not infringe on IP rights can enhance operational efficiencies and data management.

"There's this side of AI, which creates efficiencies in the back office and finds the gaps in your existing revenue. AI is far better at parsing massive amounts of data than any human is. When systems are interconnected inside your organization, AI can help propagate and fill in the gaps between those systems." - Edward Ginis, Co-Founder at OpenPlay

However, licensing complexities and the potential misuse of artists' likenesses and voices are significant concerns. According to The World Economic Forum’s Global Risks Report 2024, misinformation and disinformation will be the world's number one threat in the next two years. To that extent, the rise of deepfake music underscores the need for regulatory frameworks to protect artists. While currently no federal regulation oversees this technology in the US, several federal and state laws aim to regulate its use. Additionally, Congress is considering a new legislation that would regulate the creation, disclosure, and dissemination of deepfakes.

Music Data Quality and Interoperability

The importance of music data management and interoperability cannot be overstated. Clean and accessible data is foundational to leveraging AI effectively. However, many smaller labels and publishers lack the resources to invest in robust data systems, making them reliant on external services.

To address music data exchange issues, the industry rallied around Digital Data Exchange (DDEX) - a consortium of leading media companies, music licensing organizations, digital music service providers, and technical intermediaries. Since then, the DDEX protocol has solidified its position as a common set of standards for communication in the digital media supply chain.

"The days of data hoarding are over. There is a fundamental shift in terms of sitting on information by itself doesn't mean anything. Generating insights from it is more valuable but sharing that information and increasing the data asset quality is far more important to us." - Muhammad Qasim, CIO at SESAC Music Group

The industry has made strides, particularly with legislative changes that have improved data availability and transparency. In 2019, The Mechanical Licensing Collective (The MLC) - a nonprofit organization designated by the US Copyright Office to collect digital mechanical royalties, was established to implement the Music Modernization Act signed into law in 2018.

Another question to consider is whether music data is ready for the changes that AI-generated music is bringing to the table. Comprehensive, well-prepared data is essential to navigate future technological changes, whether driven by AI or other innovations.

"I think the question should be “Is our data ready?” That’s what everyone should be thinking about in preparation of what comes next. Data readiness, preparedness, and the fact that you have your content as defined as possible." - Edward Ginis, Co-Founder at OpenPlay

AI-Generated Music in Production and Discovery

Despite many challenges, AI and machine learning have democratized music creation, with AI-generated ambient tunes, royalty-free music generation, and automated audio mixing evolving into thriving industries. Streaming services leverage AI algorithms for personalized music recommendations and in-depth song analysis. AI's key benefit lies in its ability to analyze vast amounts of data, identify patterns, and predict trends, aiding producers and marketers in crafting audience-engaging content.

However, these advantages raise regulatory challenges, posing ethical and legal questions. Determining copyright ownership for AI-generated music and defining its status as original or derivative content is a pivotal issue. The lack of regulations in this evolving landscape underscores the need for new regulatory frameworks, especially with the growing adoption of AI in music.

Looking Forward: Collaboration and Innovation

In the AI era, collaboration and innovation are essential for the future of the music industry. Music businesses need to build systems that facilitate data sharing and interoperability. The industry's historical trend of hoarding data must change to foster a more collaborative and efficient environment.

"Data interoperability between companies is very important. If you are a tech company building a platform, you should build doors and windows. Build a way for us to communicate with each other. The only way we're going to be ready for AI is when we can speak to each other." - Edward Ginis, Co-Founder at OpenPlay

While AI presents exciting opportunities for new revenue streams and operational efficiencies, it also brings significant ethical and practical challenges. The industry's ability to navigate these challenges will depend on its commitment to data readiness, collaboration, and the fair compensation of IP holders.

Originally published here.