Universal Music Group issues its sternest warnings yet on AI-generated content in its quarterly earnings call amidst solid earnings in 2023.
Universal Music Group’s earnings call on Wednesday was notable not just for the company’s 11.5 percent rise in revenues in the first quarter of 2023 — but for the music giant’s strong remarks about the fast-rising presence of AI-generated content in the music world.
Doubling down on earlier remarks UMG made when “Heart On My Sleeve,” a song created using AI-generated voices emulating two of the company’s biggest stars, Drake and The Weeknd, exploded across the internet, Chairman-CEO Lucian Grainge issued some choice fighting words for generative AI should it continue down the current path.
“The recent explosive development in generative AI will, if left unchecked, both increase the flood of unwanted content hosted on platforms and create rights issues with respect to existing copyright law in the U.S. and other countries, as well as laws governing trademark, name and likeness, voice impersonation, and right of publicity,” said Grainge.
“Much of the latest generative AI is trained on copyrighted material, which clearly violates artists’ and labels’ rights and would put (streaming) platforms completely at odds with the partnerships with us and our artists,” Grainge continued. “Should platforms traffic in this kind of music, they would face the additional responsibility of addressing a huge volume of infringing AI-generated content.”
“Any way you look at it, this oversupply, whether or not AI-created, is simply bad. Bad for artists. Bad for fans. And bad for the platforms themselves.”
Of chief interest is the company’s planned “artist-centric” model, which Grainge says enables platforms to “focus on rewarding and enhancing the artist-fan relationship and at the same time elevate the user experience on their platforms by reducing the sea of ‘noise,’ better highlighting the artists and music their customers care about most, and eliminating unauthorized, unwanted, and infringing content.”
Grainge discussed “the pressing need to redefine the streaming model in a manner that appropriately rewards those artists whose music drives fans to engage — and remain engaged — on platforms in the first place” while addressing “the flood of content on platforms that fans neither want nor choose to consume.”
Meanwhile, Grainge emphasized that the company views AI “when properly developed and employed, as a powerful tool for our future.”
“We already employ AI in a variety of ways: identifying new audiences for our artists, optimizing the production, mixing, and mastering of recordings, and enhancing the quality of music experiences, such as immersive sound,” Grainge explained. “We hold several patents in these kinds of AI applications. I am confident that, in the service of artists, AI will meaningfully accelerate our business in the years to come.”
UMG’s call began with Grainge discussing the company’s results for the quarter, which saw the revenue from streaming and subscriptions rise nearly 10 percent to $1.47 billion, with physical revenue jumping 32 percent to $346 million — attributing to massive releases like Taylor Swift’s Midnights. Downloads and other digital revenue continued to decline, down 19 percent.
Universal Publishing also had a strong quarter, with revenues rising 13.3 percent to $469 million. Digital revenue was up nearly 21 percent year-over-year to $255 million, while synch was up 11 percent to $76 million. Performance dipped by 1 percent to $99 million.