Artificial intelligence could transform the future of sound. The market for generative AI in the music industry is taking off, with both huge opportunities and substantial risks for creative professions. A study by Goldmedia consulting and research group found that music creators could lose up to 27 percent of their revenue by 2028 as a direct result. Klaus Goldhammer, Managing Director of Goldmedia, says artists are calling for regulations to protect their jobs.
“There is a huge demand from authors and composers for consent, for a licensing scheme, for fair remuneration”, Goldhammer said, adding that nearly a third of authors and composers “already use AI models for their musical and creative work. This shows that creative people are open to AI models (…) But at the same time, they are in fear of losing their livelihoods to AI models, and this is a profound problem”. Goldhammer says there’s no turning back the AI music wave. “I think we are in the midst of a very profound revolution, which is AI, and it’s not over yet. My idea of a big revolution to come is when an AI-generated artist will have an AI-generated song becoming the number one hit in the world!” Also, AI isn’t the only phenomenon transforming the music industry. In 2024, would-be concert goers were taken aback by soaring ticket prices for hot acts like Oasis, as the live music circuit embraced the dynamic pricing model.
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“There is a huge demand from authors and composers for consent, for a licensing scheme, for fair remuneration”, Goldhammer said, adding that nearly a third of authors and composers “already use AI models for their musical and creative work. This shows that creative people are open to AI models (…) But at the same time, they are in fear of losing their livelihoods to AI models, and this is a profound problem”. Goldhammer says there’s no turning back the AI music wave. “I think we are in the midst of a very profound revolution, which is AI, and it’s not over yet. My idea of a big revolution to come is when an AI-generated artist will have an AI-generated song becoming the number one hit in the world!” Also, AI isn’t the only phenomenon transforming the music industry. In 2024, would-be concert goers were taken aback by soaring ticket prices for hot acts like Oasis, as the live music circuit embraced the dynamic pricing model.
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http://www.france24.com
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NewsTranscript
00:00Hello and welcome to People & Profit. I'm Kate Moody. The technology of artificial intelligence
00:19is evolving rapidly and being integrated into nearly every walk of life. Creative professions
00:26are seen by many as being the most at risk. The music industry is among those sounding
00:31the alarm. Artists and creators are worried about the impact on their finances, as well
00:36as the human touch that helps them connect to their fans.
00:39Well, we're joined now by Klaus Goldthamer, Managing Director at Gold Media Consulting
00:44and Research Group, which has conducted a wide-reaching study on artificial intelligence
00:49in music. Thank you for being with us today. Your study suggests that the market for generative
00:54AI in the music industry will reach some $3 billion by 2028. It's a tenfold increase
01:01in just five years. Why are we seeing it growing so fast?
01:04Well, the answer is simple because people use it and the creative AI output is so astounding.
01:11So open AI alone made $3.7 billion in 2024 and is expected to make almost $12 billion
01:18in 2025. So this is impressive and it shows the market volume of AI models, which are
01:26all based on the creative works of composers, authors and other creative people.
01:32There's a downside to this, a potentially devastating impact for artists financially.
01:37Your study found a potential 27% drop in music creators' revenues by 2028. Can you explain
01:45why we're seeing that and what might be done to prevent or at least mitigate that?
01:50Well, we went through all the different tariffs and revenue streams of licensing entities
01:56and forecasted the revenues for the next five years without AI and with the impact of AI.
02:02So revenues from public concerts, for example, are unlikely to be affected, but background
02:08music or movie music is already replaced by AI-created music. So from this difference
02:15between what the revenues would be without any regulation and with regulation, we can
02:21calculate the massive impact AI has already on the music industry and especially on the
02:27creative people. And what can be done? Well, I guess it's some sort of regulation and licensing
02:34model which could improve the situation.
02:39A lot of artists are also worried about having their existing copyrighted music being used
02:45in AI training models, for example. Is that an area where they might be able to fight
02:49for a bit more control?
02:51Absolutely. There is a huge demand from authors and composers for consent, for a licensing
03:01scheme, for a fair remuneration. And it's all based on the demand that there should
03:08be a political solution to this problem. And it could all affect the situation of authors
03:15and composers in a much positive way.
03:20And there are also some real potential benefits here. Can you talk us through what kind of
03:24opportunities you would see from being able to use AI in this creative process?
03:31Well, AI is already a profound tool for many musicians. So, in our research, we found that
03:39almost one third of authors and composers already use AI models for their musical work
03:46and their creative work. And this shows that the creative people are open to AI models
03:53to use them and to take advantage of some ideas and some thoughts that they can derive
04:01from these models. But at the same time, the people are in fear of losing their livelihood
04:12towards AI models. And this is a profound problem.
04:18And that's true for other creative professions as well. It's not just the music industry.
04:23Not only for creative profession, but also for lawyers or doctors and many other journalists,
04:30for example. And they all are affected by AI models in a very serious way.
04:36Yes, I can assure you that journalists are certainly keeping a very close eye on what
04:40AI can do. Tell me a bit about where things stand in terms of regulation. Are some regions
04:47of the world taking action to protect their creators faster than others?
04:52Well, yes. On the one hand, some of the AI model operators are now sued by the music
05:02industry. This is the one step. But I think the German licensing body EMA has now proposed
05:10a new licensing model. It's a two-column model. And I think it's the first licensing scheme
05:18in the world. So the idea is that column one is a remuneration scheme of 30% of the revenues
05:24from the AI providers. And the other column is about the revenues which are made from
05:29the AI-generated output. So if you propose or if you produce an AI-generated song that
05:38becomes very successful, then this can be also licensed or this can also be eligible
05:46to licensing B2 to the GEMA.
05:51Artificial intelligence certainly isn't the only thing that's changing in the music industry
05:55at the moment. Klaus, stay with us for a moment, if you will, while we take a look at a phenomenon
05:59that really hit fans of live music around the world this year. And that's the surge
06:03of dynamic pricing for concert tickets. With artists making less and less from album royalties
06:09and streaming, many are relying more on revenue from tours. And that's putting pressure on
06:15would-be concertgoers. Aurore Cloé Dupree has the story.
06:23Fans had been waiting for this for 15 years. Oasis finally reunited. But their excitement
06:31soon turned into frustration as they queued for hours online only to find out that prices
06:38had soared.
06:39Instead of it being 150 pounds, which is already quite expensive for a ticket, it was asking
06:44for 350 pounds for a standing ticket.
06:48The process of buying concert tickets has become absolutely ridiculous.
06:55It's called dynamic pricing. Prices aren't fixed, they are adjusted, often using algorithms.
07:02The higher the demand, the higher the price.
07:06Dynamic pricing is something that we, I think, are all quite familiar with, whether it's
07:10sort of airlines or hotel rooms or train tickets or Uber surges. But I think we haven't really
07:16seen it so much before maybe in concert tickets in this country.
07:21The UK and the EU Commission are now investigating Ticketmaster. The US-owned ticket giant insists
07:28that prices are set by artists and their management. Oasis announced it would abandon the practice
07:34for the North American leg of its tour.
07:38Other artists like Taylor Swift and Ed Sheeran are now taking a stance against dynamic pricing.
07:45But according to financial analysts, this trend might not last very long. Since the
07:49Covid pandemic, many consumers are adopting a YOLO attitude, saying they're ready to fork
07:55out a lot of cash to see their favourite artist.
08:03Klaus Goldheimer, thanks for staying with us. What's your take on this shift? Could
08:08attending concerts become out of reach for many fans? And is there anything to be done
08:12about that?
08:13No, I don't think so. I personally have been waiting for dynamic pricing for a long time.
08:19It's well known in tourism, for example. And there is a high willingness to pay for a concert
08:26or for your favourite artist. And at the same time, there's this thing called the second
08:31market. And so people are buying tickets very cheaply and selling them on the second market
08:37for a very high price. So this idea of dynamic pricing is a much better way to sell tickets
08:46to everybody and according to their willingness to pay. And as musicians rely heavily on the
08:52revenues from concerts, I think it's better for them to to get the willingness to pay
08:57from from their from their fans on a fair level and not on the second market.
09:04And is that only true for big global stars? What about smaller acts who are also being
09:11impacted by this shift in the way that tickets are sold?
09:15I think it's also I think it also applies to to to smaller stars or local local musicians,
09:24because you can implement dynamic pricing on lower scales as well. And once again, for
09:32the musicians, it's a it's a better way to generate more revenue from their concerts
09:37and they need that and they can exclude the secondary market. And so in overall, it's
09:45a better solution, I think. And at the same time, if the prices would be too high, nobody
09:50would go to the concert anymore. So it has to be a fair and and attractive method. Otherwise
09:58people wouldn't wouldn't do it. There has been a really huge change in the
10:03past, let's say, two decades or so with the shift to streaming services. In your opinion,
10:08what's the next big revolution for the music industry? Are you expecting changes in terms
10:12of the way we consume music? Well, I think we are in the midst of the very,
10:20very profound revolution, which is AI. And this is not over yet. So my idea of the of
10:29a big revolution to come is when an AI generated artist will have an AI generated song becoming
10:39the number one hit in the world. And I'm waiting for this to come in the first time.
10:46Anywhere in particular that we should be looking out for that? Do you think a specific genre?
10:51Probably it's pop music. Anything else has been done already. So so classical music has
11:00has has had its AI moments and even the Beatles songs had their AI moments. I'm waiting for
11:07something completely generated from artificial intelligence becoming the number one hit in
11:13the world. We'll keep an eye on the top of the charts
11:15then. Klaus Goldhammer, thank you so much for joining us today on People & Profit. Well,
11:20that's all for now. Don't forget to look for People & Profit on the podcast platform of
11:23your choice or as always on the France 24 website. Until next time, thanks for watching.