By Gary Symons
TLL Editor in Chief
Universal Music Group is making huge moves to change how musicians are paid for streaming fees and for the use of generative artificial intelligence (AI).
The company, known as one of the ‘Big Three’ for music companies globally, is working with the Deezer platform on streaming rights, and with Google on a deal to use musician’s voices for AI-created music.
Both deals could usher in some industry-altering changes to the entire music licensing sector.
Google and Universal Music negotiate deal over AI ‘deepfakes’
The first of the two deals to be announced involved a deal between Google and Universal over the issue of AI ‘deep fakes’, in which generative AI is used to create music using an imitation of an artist’s voice and musical style.
The Canadian superstar Drake, who is repped by Universal, is among the artists most affected by these Deep Fakes, with literally dozens or hundreds of songs airing on YouTube using his voice.
Drake in April slammed a song that used AI to mimic his voice, calling it “the final straw”, while rapper Ice Cube has described deep fake tracks as “demonic.”
UMG is trying to get ahead of the trend and, reasoning that it can’t simply stop the AI onslaught, the company is working with Google to preemptively license artists’ melodies and voices for songs generated by artificial intelligence. The move is seen as a way for the music business monetize one of its greatest looming threats.
The British newspaper The Guardian revealed through four independent sources that the two companies are negotiating a partnership that would see artists and Universal paid licensing fees for use of the artists’ voice. Google is the creator of the generative AI bot Bard. Google has also made it clear that music creation will be a major part of its business model going forward. In May, Google made available its new, experimental AI tool MusicLM, which can turn simple text descriptions into music.
Users are already able to sign up in Google’s “AI Test Kitchen” on the web, Android, or iOS. Creating a new song is as simple as typing in a prompt like “soulful R&B for a dinner party,” and the bot will create a new song in just seconds.
However, without a licensing agreement, MusicLM would not be able to train its generative AI bot with music from Drake, and nor could it create a new song with the prompt, “create a soulful R&B song using the voice and style of Drake.”
Other generative music AI bots are doing that, however, touching off a licensing crisis for the industry. Just recently, the voice of Johnny Cash was famously used on an AI-generated rendition of the pop single ‘Barbie Girl’, which enjoyed a major boost in streaming charts thanks to the Barbie Movie.
The issue is being looked at with alarm by the industry and my government, which regulates intellectual property.
“An artist’s voice is often the most valuable part of their livelihood and public persona, and to steal it, no matter the means, is wrong,” Universal Music general counsel Jeffrey Harleston told US lawmakers last month.
The Guardian reports that discussions between Google and Universal Music are at an early stage and no product launch is imminent, but the goal is to develop a tool for fans to create these tracks legitimately, and pay the owners of the copyrights for it, said the newspaper’s sources. Artists would have the choice to opt in or opt out.
The situation is very similar to an earlier conflict between tech giants and music rights companies during the early days of Google-owned YouTube. Some users began adding popular songs to their videos as soundtracks, and some simply put up their own music videos, sometimes accompanied by the song’s lyrics. The music industry initially filed lawsuits against YouTube for copyright infringement, but later negotiated a licensing system through which these types of YouTube videos generate approximately $2 billion a year.
For Google, the deal would allow it to host a new and massive stream of new content on YouTube and other services, with the only cost being licensing fee payments to copyright holders.
UMG and Deezer Investigate New Model for Music Streaming Payments
UMG’s other major negotiation right now involves Deezer, one of the world’s largest independent music streaming platforms.
The companies have announced an initiative that will see them jointly investigate “potential new economic models for music streaming that more fully recognize the value artists create.”
“Through this collaboration UMG and Deezer aim to develop new methods that holistically reward recording artists and songwriters for the value they create and to reimagine and update the engagement model for Deezer’s users and the artists they love,” the companies said in a joint statement. “Deezer was one of the first platforms to commit to exploring alternative payment models to help assure artists are compensated fairly. This initiative underscores the company’s continuous and unwavering commitment to advancing these efforts across its platform.”
While AI is a looming threat or opportunity, the rise of streaming has already transformed the music industry, for better and for worse. Many musicians complain the fees they are paid for streaming pale in comparison to the amount of money they would have made in the days when music was purchased on a record or CD. As Universal acknowledges, “The rise of Deezer and other subscription streaming services remains the most significant phenomenon to occur in the music industry in decades, driving growth and opening opportunity for artists and fans around the world. While streaming has become the main method of consumption for music fans globally, the streaming renumeration model has not evolved meaningfully during that time.”
The partners say are trying to find a model that will better serve professional musicians, while still working for fans and the streaming services themselves.
“As a key player in the music industry, we work with all labels to find ways to make the ecosystem fairer and help artists monetize their music better,” said Deezer CEO Jeronimo Folgueira. “The current system has clear issues that need to be addressed, such as increasing amounts of non-music tracks uploaded on platforms, poor quality covers with misspelt artists’ names and songs to ‘steal’ streams, and people trying to trick the system with the length of tracks.
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“This hurts true artists, makes it harder for new ones to emerge and also damages the fan experience,” Folgueira argues. “We believe in quality and fairness at Deezer and with this initiative together with UMG we will look into how we can improve the model to everyone’s benefit. Music is extremely undervalued today and as part of the artist-centric discussion we are keen to find additional ways of increasing monetization, to the benefit of real artists, the labels and platforms like Deezer.”
There are a lot of moving parts in the talks, but the major change will see a new payment model that provides higher payouts to popular artists who are full-time musicians. Deezer will now pay higher fees to artists under the Universal label if fans actively seek out their music, rather than hearing it simply because a song auto-plays on the Deezer app.
“The new initiative between Deezer and UMG will seek to better align the interests of artists, fans and streaming services and explore ways in which artists at every point in their careers and from every genre and geography can more fully benefit commercially from streaming,” the partners say. “With a foundation in deep data analysis, the partnership will look at the benefits and evaluate the viability of different economic models aimed at driving subscriber growth, forging stronger bonds with music fans on the platform and developing commercial opportunities that benefit artists and the broader music community.”
In addition, the companies are looking at other ways they can increase the value of music to fans. Deezer said it is focused on developing new ways to connect artists with their fans, and in ways that can financially benefit those artists. That might include programs like fan rewards, in-app livestreaming and View On Demand concerts, alongside lyric translations, music quiz functionality and much more.
“Deezer has long advocated for a re-evaluation of subscription’s economic model,” said Michael Nash, UMG’s EVP and Chief Digital Officer. “We’re thrilled Jeronimo and his team are partnering with us to explore how we can evolve streaming for the benefit of the entire ecosystem of artists, labels, platforms and fans.
“Such collaboration is critical to the success of the Artist-Centric initiative. While there won’t be one uniform quick fix—subscriber acquisition and retention dynamics and metrics vary by platform—our partnership with Deezer will help accelerate this entire enterprise.”
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