What is a Digital Download?

Over the last decade, the digital music industry has gained significant momentum. Many digital platforms—streaming services, downloads, digital media players, webcasters, and more—have grown and consolidated to become major players in an entirely new sector of the music industry. According to Statista, an online market research data portal, over half of all music industry revenue in 2017, or $2.8 billion, can be attributed to digital music. In 2018, 23.6 million people used downloads to access digital music.

The rise of computers and the Internet as both the primary means and medium for music consumption starting in the early 2000s created seismic disruptions within the music industry. As a result, relationships between artists, songwriters, music publishers, record labels, recording artists, distributors, retailers, consumers, and other industry players changed fundamentally.

Digital downloads are a great starting place for anyone seeking to better understand the modern music industry.

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:

CISAC’s first global study on AI’s impact predicts creators could lose €22 billion in revenue by 2028 (€10 billion in music, €12 billion in audiovisual) if regulations remain unchanged. While AI offers opportunities, its rapid growth could heavily favor tech firms over human creators.

The EU’s Intellectual Property Office has published its latest report on piracy across Europe. Although music piracy in 2023 was up slightly, it’s down significantly compared to 2017. Europeans are also illegally accessing unlicensed TV services much more frequently than they are pirating music.

Musical AI and Beatoven.ai are collaborating to launch a “fully licensed, rightsholder-compensating” generative AI music platform in 2025. The platform, built on Beatoven.ai’s technology and trained on over 3 million copyrighted tracks, will ensure revenue sharing for rights holders. Musical AI will handle licensing, attribution, and payments, offering the tool as a white-label service to enterprise clients.

Now, the details...

Exploration Weekly - December 6, 2024
Compiled by Ana Berberana

CISAC: Generative AI Could Hit Music Creators to the Tune of €10 billion Over Rest of the Decade

CISAC has published the first ever global study measuring the impact of AI in the music sector. While music companies and their partners have taken a proactive approach to the responsible use of artificial intelligence in music creation, along with legal action and notifications aimed at generative AI firms, the CISAC report underscores the concerns about the impact of the technology in the years ahead. In the US, the NO FAKES Act has been supported by the music industry. The legislation has been introduced to hold individuals or companies liable for damages for producing, hosting, or sharing a digital replica of an individual performing in an audiovisual work, image or sound recording. The new study, which also covers the audiovisual sector, calculates that generative AI will enrich tech companies while substantially jeopardising the income of human creators in the next five years. It was commissioned by CISAC (International Confederation of Societies of Authors and Composers, representing over five million creators), and conducted by PMP Strategy. CISAC acknowledges that AI has the power to unlock new opportunities for creators. Their forecast of the financial impact is based on a scenario where the regulatory framework is unchanged. While the revenues of generative AI providers will see dramatic growth over the next five years, creators risk losing a large share of their current income due to AI’s impact on human-made works. According to CISAC, music and audiovisual creators will see respectively 24% and 21% of their revenues at risk of loss by 2028. This amounts to a cumulative loss of €22 billion over the five-year period (€10 billion in music, €12 billion in audiovisual). The study finds that the market for music and AV content generated by AI will increase exponentially in the next five years, growing from around €3 billion now to €64 billion in 2028. It forecasts that future revenues of Gen AI providers will rise to annual revenues of €4 billion in music (up from €0.1 billion in 2023) and €5 billion in audiovisual (up from €0.2 billion) by 2028.

Music Piracy in Europe Down 75% in Seven Years, and Significantly Behind TV Piracy

Music piracy that takes place online grew slightly in Europe last year, according to a new report from the European Union Intellectual Property Office based on data from piracy protection service MUSO. However, music piracy levels today are down by 75% from 2017. Consumers also now use music piracy services less than piracy platforms that provide access to TV programmes, films, software and publications. In the case of TV, considerably less. The study also looks at differing levels of piracy across the various EU states, explaining that a country’s “wealth, inequality, population structure and youth employment opportunities”, as well as “attitudes towards piracy” and availability of legal content services, all impact on how many people choose to access content from unlicensed platforms. Most of which is unsurprising, though when it comes to levels of youth unemployment, the findings are sometimes somewhat counterintuitive. With film, higher levels of young people being unemployed results in higher levels of piracy, which makes sense as those people will have less expendable income. However, with TV and music piracy, higher levels of youth employment in a country seems to actually reduce piracy levels. One possible explanation for that trend, the report says, “could be that unemployed young people tend to live with their parents who are likely to pay their subscriptions” for TV and music services.

Musical AI and Beatoven.ai to Jointly Launch What They Claim to be the “First Fully Licensed” AI Music Generator

AI training content licensing and attribution company Musical AI is teaming up with Beatoven.ai to create what they call the “first fully licensed, rightsholder-compensating, generative AI platform” trained on copyrighted music and other audio. Musical AI and Beatoven.ai’s collaborative project, set to launch in the second half of 2025, aims to “ensure rights holders are compensated for every use of their repertoire.” The platform will be built on Beatoven.ai’s technology, training on a catalog of over 3 million songs, loops, samples, and sounds. Musical AI will provide data licensing, attribution of generated outputs, and payments to rightsholders. Musical AI will exclusively offer the tool to its enterprise clients as a white-label service. The partners noted that the generator will be “completely legal and licensed.” Rights holders will receive revenue shares based on model usage. Beatoven.ai, which provides AI-powered royalty free music for content creators, claims to be “one of the first” Fairly Trained AI music generators. The Fairly Trained certification was founded by former Stability AI executive Ed Newton-Rex in January to evaluate and certify AI models based on their respect for creators’ rights. Musical AI and Beatoven.ai are among a number of AI companies that have received Fairly Trained certifications. Other firms to secure this badge include AI sound wellness company Endel, Infinite Album, Lemonaide, LifeScore, Musical AI, Rightsify, Soundful, and Tuney.

How Do People Listen to Music? Radio Remains Surprisingly Strong In Latest Survey

Despite substantial changes in non-music audio, listeners in the US spend 74% of their average daily audio time listening to music as opposed to podcasts and other spoken-word audio. A new report from Edison Research reveals just how much Americans listen to music, and it’s more often than you might think. Despite the attention given to the prevalence of audiobooks and podcasts in the press, listeners in the United States spend 74% of their average daily audio time listening to music. In a way, this might sound obvious — there’s a lot more music out there than podcasts and audiobooks. As Edison Research puts it, “If podcasts go back decades, music libraries go back hundreds of years (we’re looking at you, Bach, Gershwin, and more), and those substantive libraries are available on a variety of audio platforms.” Interestingly, for listeners aged 13-plus in the US, 32% of their music-listening time is spent with AM/FM radio and radio streams, which makes radio the most-used source to deliver music content. Streaming services like Spotify, Apple, Amazon, Pandora, and YouTube trail closely behind at 28%, and YouTube for music and music videos accounts for 18% of daily music listening. Another 9% is spent with SiriusXM, 9% with “owned music” such as vinyl, CD, or downloaded digital files, and 3% is spent with music channels on TV. Notably, this data pertains to listeners aged 13 and older. Looking at listeners aged 13-64 specifically, streaming surpasses AM/FM radio by one percentage point, with streaming accounting for 31% of music listening by this demographic.

Random Ramblings

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  • Iconic Pop Music Producers: How Did They Impact the Genre’s Sonic Evolution?
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  • Spotify Wrapped: The Top Artists, Songs, Albums, Podcasts, and Audiobooks of 2024.

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