Google Enters AI Music, Tidal’s Experiment & Spotify Backtracks On Podcasts
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Happy Friday everyone!
Last week, I put out a newsletter outlining three trends I believe playing out in a big way in 2023 in the Music Business 👇🏻
🤖 Generative AI Music
💰Questioning Streaming’s Business Model
⭐️ Changing definition of the ‘Music Superstar’
Just this week, it seems as if a couple of these predictions are already coming true 🔮
Now i’m far from claiming that I had anything to do with it, but the three trends I outlined just seemed too obvious to not play out this year. However, the fact that major developments start happening within a week is something I didn’t anticipate 😅
What am I talking about exactly? Within last week:
📝 Google released a paper titled ‘MusicLM’- an AI model they have built for generating new music using text & audio prompts
💰Universal Music partnered with Tidal to build an ‘Artist & Fan Friendly’ Streaming Model
🎙Spotify backtracked on it’s strategy for Podcasts, under pressure to turn profitable
Let’s dive deeper into each of it 👇🏻
Google Crashes The AI Music Party 🤖
Last week, I wrote about how Google had issued ‘Code Red’, even bringing back founders Larry Page & Sergey Brin from their Billionaire Island Hideouts after facing an existential crisis in the face of Open AI’s Chat-GPT threatening to disrupt search on the Internet along with Microsoft.
Their first response?
Apart from laying of 12,000 of their employees, it released a research paper on an AI Model being built internally called ‘MusicLM’- which lets users create new music based on text or audio prompts you feed into it.
What does that mean?
Say you want to create a new sound sample that sounds like ‘House Music in 90’s Berlin’, but don’t have any skills to actually produce such a sound- Google’s AI model will generate it for you in a second.
Not just that, Google’s model will let you whistle a tune & it will throw back a proper sample out of it in response. Oh, & that’s far from the end of it.
They say ‘A Picture Is Worth A Thousand Words’ but Google’s new model goes a step beyond & asks the question- how about a melody? It can even take Vincent Van Gogh’s ‘Starry Nights’ & using a text description of the image create an audio track 🤯
Pretty cool right? Unfortunately i can’t add audio in this Medium article but check it out for yourself here.
So why isn’t it going viral like Chat-GPT did & why aren’t we seeing users flooding social media with their crazy audio creations?
Because in typical Google fashion, they chose to not actually release the model out for the public, owing legal & safety concerns arising from the AI generated music 🤷♂️
Trained on more than 280,000 hours of music, co-authors of the paper have cited concerns around copyrights, as they found around 1% of the AI generated music was directly replicated from the songs it was trained on.
While that might not sound like a lot, to was enough for Google to choose not to release the model 👇🏻
We acknowledge the risk of potential misappropriation of creative content associated to the use case. We strongly emphasise the need for more future work in tackling these risks associated to music generation.
Would you play around with it if Google decided to launch it publicly? 🤔
Universal & Tidal Partner For A New Streaming Model 🎧
There has been much hue and cry about how the streaming business model works, and how barley any value accrues to artists.
Sir Lucian Grainge- CEO of Universal Music, issued a war-cry at the start of the year, to innovate out of the shoddy business model that music streaming had popularised, centred around pro-rata royalties.
And it seems like he’s leading the biggest record label in the world to put money where their mouths are 💰
Earlier this week, Universal announced a partnership with — founded by Jay-Z & later acquired by Square, to explore alternative streaming models & put ‘Artists & Fans’ at the centre.
TIDAL and UMG will research how, by harnessing fan engagement, digital music services and platforms can generate greater commercial value for every type of artist.
The research will extend to how different economic models could accelerate subscriber growth, deepen retention, and better monetise fandom to the benefit of artists and the broader music community.
Interestingly enough, Tidal had its own plans to disrupt the status quo with it’s ‘Fan-Centred Royalties’ which I have covered on here previously
However, for now they seem to have put a pin on that & joined hands with Universal to explore a different model altogether.
Sir Grainge has previously cited grave concerns in his memo sent to UMG staff worldwide over how streaming platforms have a bad business model
There is a growing disconnect between, on the one hand, the devotion to those artists whom fans value and seek to support and, on the other, the way subscription fees are paid by the platforms.
Under the current model, the critical contributions of too many artists, as well as the engagement of too many fans, are undervalued.
I couldn’t agree more with this, & building for solving this exact problem with Incentify.
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Spotify Backtracks On It’s Podcasting Strategy 🎙
Spotify has had a rather interesting week. After laying off 6% of its staff last week, they announced their Q4 results for 2022 this week, & seemed to have blown it out of the park 🚀
I won’t bore you with all the details but here’s a highlight:
⬆️ 10 Million New Premium Subscribers (14% Gain)
⬆️ 33 Million New Monthly Active Users (20% Gain)
⬆️ €3.17 Billion Revenue (20% Gain)
⬆️ €270 Million Net Loss (592% Gain)
So while they had their best 4th quarter ever with record number of subscribers added, their net loss increased almost 6 times when compared to last year 🤯
And Spotify seems to be finally acknowledging this and dropping its strategy to go all-in on producing original podcasts. Lucas Shaw covered this really well in his Bloomberg piece👇🏻
Makes sense right?
Spotify has already spent north of a billion dollarson various podcast related acquisitions & productions, but is starting to realise that instead of obsessing over podcasts being exclusive to Spotify, it has to build an Ad network to effectively monetise podcasts.
In fact, there have been various studies showing that being exclusive to Spotify is in fact harming the reach and earning potential of podcasters 📉
Our Take On This? 🤔
It already feels like 2023 is the year where the Music Industry is ready to shake things up in a big way 💥
Unprofitable business models such as those of Spotify will seriously be questioned by investors, with some in fact even going as far as claiming that they might get acquired by a Big Tech company.
We’re building for this at Incentify & if you’re an artist or just curious about what we’re upto, please reply here or DM us on Instagram, would love to chat!
Originally published at https://incentify.substack.com on February 3, 2023.
