Exploration Weekly - US Congress introduces “No AI Fraud Act” / TN Governor Bill Lee Introduces “ELVIS” Act / Global Music Streams Grew by 33.7% to 7.1tn in 2023

There is a lot of video content out there, and much of it uses music! Synchronization licensing is the process by which production companies of audiovisual works clear the rights for outside music to use in their videos. Synchronization is a burgeoning corner of the music industry, and for a musician, a placement in a major television show, film, advertisement or video game can boost their career in innumerable ways.

Our guide has been written to provide a comprehensive overview of the world of synchronization licensing.

In this newsletter:

• Music Industry Applauds Introduction of “No AI Fraud Act” in US Congress
• Governor Bill Lee Introduces ELVIS Act For Likeness, Voice & Image Protection
• Global Music Streams Grew by 33.7% to 7.1tn in 2023
• How Many Tracks Will Be Eliminated by Spotify’s 1,000-Play Minimum? Now We Have a Number
• SoundCloud Private Equity Owners Mulling $1 Billion Sale

US Congress introduces a bill that aims to establish a federal-level "right of publicity" to protect individuals from unauthorized use of their likeness, voice, or identity in AI-generated deepfakes.

Tennessee Governor Bill Lee has introduced the ELVIS Act, a legislation that aims to update Tennessee’s Protection of Personal Rights law, becoming the first state to protect individual voice, image, and likeness against unethical AI practices, particularly deepfakes and audio cloning.

The 2023 Year-End Music Report by Luminate reveals a staggering 7.1 trillion music streams globally last year, marking a 33.7% year-on-year increase.

Now, the details...

Exploration Weekly - January 12, 2024
Compiled by Ana Berberana

Music Industry Applauds Introduction of “No AI Fraud Act” in US Congress

Leading voices in the music industry and other creative fields are lauding the introduction of a new bill in the US House of Representatives that aims to protect people from having their image and voice used in AI-generated deepfakes. The No Artificial Intelligence Fake Replicas And Unauthorized Duplications (No AI FRAUD) Act was brought forward on Wednesday (January 10) by a bipartisan group of House Representatives led by Democrat Rep. Madeleine Dean of Pennsylvania and Republican Rep. Maria Salazar of Florida. The bill goes a long way to establishing a “right of publicity” at the federal level in the United States. A right of publicity is an intellectual property right that protects against the unauthorized use of a person’s likeness, voice or other aspects of their identity. Unlike many other intellectual property rights, the right of publicity isn’t consistently recognized in laws around the world, or even within the US. Of 50 US states, 19 have a law explicitly recognizing the right to publicity in some form, including California, New York and Florida, while another 11 states have recognized publicity rights as a matter of common law. The No AI FRAUD Act establishes “an intellectual property right that every individual holds over their own likeness and voice, allows individuals to seek monetary damages for harmful, unauthorized uses of their likeness or voice,” and “guards against sexually exploitative deepfakes and child sexual abuse material,” according to a statement from Rep. Dean. The law seeks to “balance the rights against the First Amendment to safeguard speech and innovation,” according to a fact sheet on the proposed law, circulated by the sponsoring representatives. “From an AI-generated Drake/The Weeknd duet, to Johnny Cash singing Barbie Girl, to ‘new’ songs by Bad Bunny that he never recorded, to a false dental plan endorsement featuring Tom Hanks, unscrupulous businesses and individuals are hijacking professionals’ voices and images, undermining the legitimate works and aspirations of essential contributors to American culture and commerce,” the fact sheet stated. Republican House Rep. Rob Wittman of Virginia, a co-sponsor, said the proposed legislation “is a crucial first step in safeguarding the intellectual property of our artists and creators from bad actors who may try to exploit their work.”

Governor Bill Lee Introduces ELVIS Act For Likeness, Voice & Image Protection

At a press conference at Studio A in Nashville on Wednesday (Jan. 10), Tennessee Governor Bill Lee introduced bicameral legislation alongside State Senate Majority Leader Jack Johnson (R-27) and House Majority Leader William Lamberth (R-44) regarding concerns about creators’ voice, image and likeness rights. The Ensuring Likeness Voice and Image Security (ELVIS) Act updates Tennessee’s Protection of Personal Rights law, making it the first state in the nation to preserve individual voice, image and likeness against irresponsible and unethical artificial intelligence (AI) in the form of deepfakes and audio cloning. The ELVIS Act seeks to protect the future of Tennessee creators from the harmful misuse of technology on some online platforms, such as computer-generated recordings that resemble artists’ voices or deepfake videos. Christian music icon Michael W. Smith welcomed the artists, songwriters, music industry folk and legislative leaders gathered at the press conference. He shared, “As a working artist and songwriter, I know how vital it is to build a creative environment that protects the work and individuality of future generations of dreamers. While I am grateful for existing tools that have helped me craft both my music and my message, even more personal gifts and attributes have a right to be protected from digital manipulations. I’m honored to be here today as a voice supporting the ELVIS Act to protect my fellow musicians today and in the future.” Governor Lee said, “From Beale Street to Broadway and beyond, Tennessee is known for our rich artistic heritage that tells the story of our great state. As the technology landscape evolves with artificial intelligence, we’re proud to lead the nation in proposing legal protection for our best-in-class artists and songwriters.” Other attendees supporting today’s update to Tennessee’s Right of Publicity law include artists, songwriters, producers and engineers such as Ruby Amanfu, Steve Cropper, Tom Douglas, Lindsay Ell, Matt Maher, Jamie Moore, Ari Morris, Lawrence “Boo” Mitchell (Royal Studios), Maggie Rose, Joanne Shaw Taylor, Gebre Waddell, Matthew West and Lainey Wilson. Artist and songwriter advocacy organizations have come out in support of the ELVIS Act, including NSAI, NMPA, RIAA, the Recording Academy, A2IM, Artist Rights Alliance, SAG-AFTRA and SoundExchange.

Global Music Streams Grew by 33.7% to 7.1tn in 2023

Yes, that’s 7. 1 trillion music streams last year across the world. The stat comes from research firm Luminate’s 2023 Year-End Music Report, which was published this afternoon. The 7.1tn streams were across audio and video services, with that total up 33.7% year-on-year. Of that total, 4.1tn were on-demand audio song streams, up 22.3%. Luminate’s report doesn’t state the video total outright, but it’s easy to calculate from its figures for total streams and audio streams. There were 3tn on-demand video song streams in 2023, up 63.3% from the 1.9tn in 2022. It may be an uncomfortable topic for music rightsholders to think about, but video streams appear to be growing nearly three times faster than audio streams. 436k tracks were streamed more than 1m times globally in 2023, up from 373.5k the previous year. At the other end of the scale, a whopping 45.6m tracks had precisely zero streams in 2023. Most of the report focuses on North America rather than global stats. Luminate says that total on-demand song streams in the US grew by 14.6% to 1.5tn in 2023.

How Many Tracks Will Be Eliminated by Spotify’s 1,000-Play Minimum? Now We Have a Number

Spotify formally unveiled its retooled royalty model (and plans for an early 2024 implementation) in November, setting in motion far-reaching revenue consequences for labels, distributors, and artists alike. The most noteworthy component of the revamped system, the aforementioned play minimum, will in practice block recording (but not publishing-side) payments for any track with less than 1,000 annual streams. While it has long been common knowledge that the pivot will effectively axe the on-platform recording revenue of many works, we now have a number – or at least an estimate – regarding the extent of the impact. Yesterday, Luminate in its annual report indicated that about 152.2 million ISRC-equipped audio uploads (presumably referring to human-created songs in the main, with the potential inclusion of some other audio) had generated less than 1,000 streams apiece during 2023. Behind the figure, the resource shows that 79.5 million tracks each scored between zero and 10 streams on the year, 42.7 million tracks racked up between 11 and 100 streams, and 30 million tracks garnered 101 to 1,000 streams. Though telling, these sub-1,000 stream counts coincide with recordings monitored not solely on Spotify, but across all major services – meaning that even more works may have failed to hit the mark on the leading music platform in particular. Focusing specifically on Spotify, however, the 152.2 million tracks with fewer than 1,000 streams to their credit during 2023 represent 82.7 percent of all the audio works tracked by Luminate. Needless to say, that means the top fifth of tracks on Spotify (and possibly different platforms) will benefit substantially from the recording royalties that would have made their way to other works.

SoundCloud Private Equity Owners Mulling $1 Billion Sale

The current owners of SoundCloud are reportedly preparing to sell the company in a deal that could top $1 billion. That is according to sources who have spoken to Sky News. According to those sources, Raine Group and Temasek Holdings have started talks with various investment banks about them working on a possible sale. Though any actual sales process isn't likely to get underway for at least a few months. Raine Group and Temasek Holdings - the latter the Singaporean state investment fund - basically rescued SoundCloud when it was on the brink of collapse back in 2017. Having originally launched to provide hosting and other services to independent creators, SoundCloud also became a licensed subscription streaming service in the mid-2010s. That was mainly to placate a music industry that had become increasingly tetchy about the amount of unlicensed music being uploaded by users to the SoundCloud platform. By becoming a licensed subscription service, SoundCloud could provide record labels and music publishers with a new revenue stream. However, running a licensed music service is a risky business, and by 2017 SoundCloud seemed to be running out of cash, resulting in significant job losses. The cash injection from Raine Group and Temasek Holdings was accompanied by a change in senior management, who subsequently began putting the focus of the business back on providing services for independent creators, although with the subscription streaming service still operating. SoundCloud has enjoyed some success in growing that creator services business, although there were still financial challenges to deal with. In August 2022 it cut its workforce by about 20%, with another round of downsizing following in May 2023, impacting approximately 8% of employees. When confirming those cutbacks to staff, CEO Eliah Seton said that the job cuts were necessary to “ensure the health of our business and get SoundCloud to profitability this year”. That seemed to work, with the company reportedly making a small profit last year for the first time in its sixteen year history. With a slimmed down business that may have a track to onward profitability and growth, it would not be a surprise if Raine Group and Temasek Holdings feel the time is now right to recoup their investment via a sale after holding the company for six years.

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