Exploration Weekly - EU Passes AI Legislation That Would Safeguard Copyrighted Music / IFPI Touts Fake Stream Takedowns in Canada / Spotify Premium Adds Full Music Videos in 11 Countries

With the rapid modernization and advancement in the music industry, there has been an influx in new ways for independent artists to launch their careers successfully. One such method that has risen to prominence is the concept of private investment in music. With the aid of these individuals or organizations, artists and music businesses can acquire the necessary financing and funding required to take the next step.

Our guide will allow artists or businesses to better understand the different types of investment they can receive, as well as the benefits, drawbacks, and conditions of entering such deals. Furthermore, our guide also explains the investor’s side of the coin, detailing why there has been a shift towards capitalizing on the music business and how profits can be achieved through a plethora of investments.

Check out some of our other guides on music industry topics at Exploration Learn , or subscribe to our YouTube channel for more information.

In this newsletter:

• European Union Passes ‘World First’ AI Legislation That Would Safeguard Copyrighted Music
• IFPI Touts Fake Stream Takedowns in Canada, Says Manipulation Services ‘Cannot Be Allowed to Continue to Divert Revenue Away from the Artists’
• Spotify Premium Adds Full Music Videos in 11 Countries
• Recorded Music Trade Revenues in the UK Grew 8.1% YOY to $1.77BN Last Year
• German Recorded Music Industry Jumps 6.6% During H1 2023

The European Parliament has approved sweeping new laws regulating the use of artificial intelligence (AI) in Europe, covering a wide range of applications including biometric surveillance and predictive policing.

The International Federation of the Phonographic Industry (IFPI) has announced the takedown of nine Canada-based sites accused of selling fake streams. This effort aims to combat the prevalence of fake streams, which has been a focus area for the IFPI in recent years.

Spotify is rolling out a beta feature for its Premium users in select markets, allowing them to watch music videos directly within the app. This feature is available in the UK, Germany, Italy, the Netherlands, Poland, Sweden, Brazil, Colombia, the Philippines, Indonesia, and Kenya.

Now, the details...

Exploration Weekly - March 15, 2024
Compiled by Ana Berberana

European Union Passes ‘World First’ AI Legislation That Would Safeguard Copyrighted Music

Sweeping new laws regulating the use of artificial intelligence (AI) in Europe, including controls around the use of copyrighted music, have been approved by the European Parliament, following fierce lobbying from both the tech and music communities. Members of the European Parliament (MEPs) voted in favor of the EU’s Artificial Intelligence Act by a clear majority of 523 votes for, 46 against and 49 abstentions. The “world first” legislation, which was first proposed in April 2021 and covers a wide range of AI applications including biometric surveillance and predictive policing, was provisionally approved in December, but Wednesday’s vote formally establishes its passage into law. The act places a number of legal and transparency obligations on tech companies and AI developers operating in Europe, including those working in the creative sector and music business. Among them is the core requirement that companies using generative AI or foundation AI models like OpenAI’s ChatGPT or Anthropic’s Claude 2 provide detailed summaries of any copyrighted works, including music, that they have used to train their systems. Significantly, the law’s transparency provisions apply regardless of where in the world a tech company acquired its data from. For instance, even if an AI developer scraped copyright protected digital music from a non-EU country — or bought data sets from outside the 27-member EU state — as soon as they are used in Europe the company is required to make publicly available a “sufficiently detailed summary” of all copyright protected music it has used to create AI works. There is also the requirement that any training data sets used in generative AI music or audio-visual works are watermarked, so there is a traceable path for rights holders to track and block the illegal use of their catalog. In addition, content created by AI, as opposed to human works, must be clearly labeled as such, while tech companies have to ensure that their systems cannot be used to generate illegal and infringing content.

IFPI Touts Fake Stream Takedowns in Canada, Says Manipulation Services ‘Cannot Be Allowed to Continue to Divert Revenue Away from the Artists’

The International Federation of the Phonographic Industry (IFPI) has announced the takedown of nine Canada-based sites that allegedly sold fake streams. This latest effort to curb the prevalence of fake streams came to light today, in a formal release that was emailed to DMN. Counting as members the Big Three labels and a number of others, the IFPI has for years been zeroing in on services through which individuals can purchase artificial plays on platforms like Spotify and Apple Music. (Stream-rippers, which enable users to download videos’ audio, remain a key focus area as well.) However, most of the long-running crackdown’s targets have been based in markets outside Canada – including, for instance, Germany and Brazil, the latter of which boasts a quick-growing music space and, per IFPI data, generates the vast majority of its industry revenue via streaming. Evidently, though, fake stream operators aren’t discriminating when deciding where to set up their platforms, which have reportedly factored prominently into money laundering schemes. According to the IFPI, it and Music Canada specifically took action against “a group of nine connected consumer-facing streaming manipulation services based in Canada” with a Canadian Competition Bureau complaint. All nine of these services as well as their sub-domains, the most popular being MrInsta.com, have been shuttered, the industry representative communicated. Addressing the development and the broader issue of fake streams, IFPI chief legal officer Lauri Rechardt emphasized the perceived income-related consequences of artificial plays for proper artists. “Streaming manipulation has no place in music,” the nearly 10-year IFPI higher-up Rechardt said in part. “Perpetrators and enablers of streaming manipulation cannot be allowed to continue to divert revenue away from the artists who create the music. The activity also harms consumers and distorts the fan experience.”

Spotify Premium Adds Full Music Videos in 11 Countries

The music videos beta for Spotify Premium users is rolling out in the United Kingdom, Germany, Italy, the Netherlands, Poland, Sweden, Brazil, Colombia, Philippines, Indonesia, and Kenya. All Spotify Premium members in these markets can see a ‘switch to video’ option on iOS, Android, PC/Mac, or TV to begin watching the music video for a song. Spotify says it is collecting feedback from users and artists to “innovate and iterate” on the feature. The idea is to make Spotify a true hub for music where listeners can choose to watch the music video instead of heading to YouTube to see it. “So many times in my own experience and for countless others, music videos play a key role in hooking you: taking you from being a listener to leaning in and becoming a fan,” adds Charlie Hellman, Vice President and Head of Music Product at Spotify. “They’re an important part of so many artists’ tool kits, and it’s a natural fit for them to live in the same place that more than half a billion people choose to listen to music.” Spotify says providing access to full music videos will give artists even more ways to connect with new fans and loyal listeners. It has built out video features before including Canvas, Clips, while offering extensive opportunities for artists to feature their music in Artist Bios with live events and merch offerings.

Recorded Music Trade Revenues in the UK Grew 8.1% YOY to $1.77BN Last Year

UK recorded music (trade) revenues increased by 8.1% YoY to GBP £1.43 billion in 2023. That’s according to the BPI, the recorded music trade association in the UK, the world’s third largest recorded music market behind the United States and Japan, respectively. That total £1.43 billion figure for 2023 converts to USD $1.77 billion at the average annual exchange rate published by the IRS. Record label revenues reported by the BPI on Thursday (March 14) comprise income generated through streaming, purchases across physical and download formats, public performance rights, and ‘sync’ – music licensed for use in film & TV, games soundtracks and advertising. BPI noted that record company earnings from public performance rights are generated by the broadcast and public performance of recorded music and that the figures presented below represent income collected on behalf of producers (i.e. record labels and not artists). The total recorded music trade revenue figure reported by BPI for 2023 was the highest nominal annual amount achieved to date for recorded music in the UK. The org has pointed out however, that once adjusted for inflation using the Consumer Price Index (CPI), UK recorded music trade revenues in 2023 were £478 million below the figure of £1.90 billion, where the industry should have been in real terms since 2006. Using the Retail Prices Index (RPI), UK trade revenues would have been £771 million higher at £2.2 billion.

German Recorded Music Industry Jumps 6.6% During H1 2023

The German Music Industry Association (BVMI) has announced the German recorded music market grew by 6.6% in the first half of 2023—reaching €1.056 billion. Physical sales were at a similar level compared to 2022 and remained stable with a slight loss (-0.8%) compared to 2022. CD sales contributed 11.2% to physical sales, while vinyl came in at 6% of the market. Meanwhile, sales of DVDs and Blu-rays in Germany saw a slight increase (+0.9%) compared to 2022. Together, all physical mediums including CDs, vinyl, DVDs, and physical single sales generated around 18% of sales, while the digital market dominates—responsible for 82% of sales. The digital segment saw 8.4% growth in H1 2023 compared to the same period in 2022. Revenues from audio streaming grew by 9.7%, while revenue from downloads declined by 4.9%. “Music sales in Germany continue to develop positively despite the economically complex overall situation,” shares Dr. Florian Drücke, Chairman & CEO of the BVMI. “For many years now, streaming has been the well-known driver that has significantly increased the market as a whole, the famous pie, ultimately benefiting everyone involved—companies and artists alike.”

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