Jan 24th | How much new music is made by AI?

Hi there,

Welcome to Indie Insider! Your go-to stop for the week’s most interesting music industry news with light analysis from me, Calvin Windschitl, co-founder and CEO of Habitat Financial .

This week we’re looking at the future of Sonos, Inc. as it battles headwinds after a disastrous 2024. Is it possible that a large music company might be interested in purchasing the high-tech audio brand? We’re also discussing how AI impacts DSPs following Deezer ’s report that 10k new AI-generated tracks are added to the platform daily. Do DSPs have what it takes to combat low-quality AI music from flooding their platforms? Finally, we’re looking at TikTok and the tumultuous weeks it’s had. What’s next for the social media giant? How long can they survive in their legal grey area?

Before we dive in, a reminder that Indie Insider is sponsored by Habitat Financial. There are so many great reasons to upgrade your royalty accounting software, but if you need one here are four:

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If any of these sound like you, it’s time to check out www.habitat.financial and book a demo with us today! Alright onto the news.

Deezer Takes a Stand Against AI-Generated Music ????

AI is flooding the music industry, and Deezer has decided enough is enough. Their newly revealed AI detection tool has uncovered that 10% of new daily uploads are fully AI-generated. This has huge implications for human artists whose revenue is being potentially cannibalized. Here is what you need to know:

• Protecting Artists: Deezer is excluding AI-generated tracks from playlists and algorithmic recommendations to protect human creators' rights and revenues.
• The Bigger Picture: With no licensing agreements in place, AI could cost music creators €22 billion in revenue by 2028, according to CISAC.
• Industry Backlash: AI companies like Suno and Udio are under fire for allegedly training on copyrighted material without permission. Lawsuits and regulatory action are heating up.

Deezer’s commitment to weeding out low-quality, royalty-skimming “noise” tracks aligns with its mission to support artists and maintain a high-quality user experience. Presumably, these numbers are similar on other, larger, DSPs. However, Spotify for example has historically lagged behind Deezer’s effort to curate high-quality music on their platform. It’s encouraging that Deezer’s AI detection technology is as advanced as it is, but until they use it to remove music from the platform, and until other DSPs leverage the same tools, the threat to the livelihood of human artists is very real.

Takeaway: The AI revolution in music is here, but AI detection technology is advancing as well.

SONOS: Struggling or Strategizing? ?????

After a rocky 2024 marked by a leadership shakeup, a botched app rollout, and faltering revenue, rumors are swirling about a potential sale of SONOS to an established music or technology company.

• Who could buy? Major players like Amazon, Spotify, and even Samsung have been mentioned as potential suitors. Apple, Roku, and other companies would also make good fits, but face headwinds or already have the capabilities in-house.
• The Challenges: Amazon may face regulatory hurdles, while analysts doubt Apple’s involvement. Still, SONOS’ premium audio tech and strong product lineup make it an attractive acquisition target.
• Spotify’s Wants Hardware: Spotify currently has no hardware revenue lines. Their “Car Thing” was a massive failure that they took offline after only. 3-years. SONOS would present an instant foothold in audio tech.
• Declining Value: With a market valuation now at $1.7 billion (down from a $5 billion pandemic peak), SONOS is facing pressure to pivot—or sell.?

The Question: Can SONOS remain independent and competitive, or is acquisition its next chapter?

TikTok’s January Shutdown: Drama, Politics, and Resilience ???????

TikTok briefly went offline for over 170 million U.S. users following a Supreme Court ruling requiring ByteDance to divest its U.S. operations. Service returned after President-elect Donald Trump intervened, but the app remains in a precarious position.

• Proposed Solution: Trump suggests a 50% joint venture between TikTok and a U.S. entity to save the platform and resolve national security concerns.
• What Happened: TikTok, along with ByteDance-owned apps like CapCut, went dark on January 18 but is now gradually restoring access.
• App Store Woes: TikTok is still unavailable for download on Apple and Google stores, adding friction for new users.?

This ongoing saga underscores the complex relationship between global tech, national security, and U.S. politics.

Impact: I’m not confident enough to make any predictions about what will happen to TikTok in the next 90 days. It’s anybody’s game. I’d continue to explore other channels of communication and distribution.

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That’s it for this week folks! Happy Friday!