Music labels settle lawsuits, shift to licensing

After a year of suing AI music startups, the music industry appears ready to play ball, and is now signing controlled licensing deals.

• Warner Music just settled its lawsuit against UDIO and struck a new licensing agreement

• At the same time, three major labels (UMG, Sony, and Warner) just have licensed their catalogs to Klay, an AI-powered music streaming startup that will let users legally remake songs. (This makes Klay the first AI-startup to land deals with all three major labels.)

• The label is also partnering with Stability AI to co-develop new tools for AI-generated music

This is probably good news for music rights investors. These deals should unlock a new revenue tier for rights holders.

But meanwhile, technology continues to outpace the royalty systems. Researchers argue that generative-music systems still lack transparent attribution and fair royalty models.

And while labels may appear progressive, musicians have a clear memory of being sidelined in deals:

“When the tech and entertainment industries negotiated licensing during the rise of streaming … labels and studios pocketed the profits and left musicians behind.”

What do you think?

cc @Adrian Boeckeler, @Adrian Fu, @Amanda Denery, @Alairé Jameson