Music Industry Confronts AI Compensation Issue

Artificial intelligence (AI) is bringing unimaginable opportunities and efficiencies to nearly every sector.

However, those opportunities and efficiencies also come with their own controversies and complications, particularly across the creative industries, where the training data used to fuel AI has sparked a debate about the future of artist compensation and copyright.

“We want to ensure that artists and IP [intellectual property] owners can collaborate with AI innovators to find ethical win-win solutions in this AI era. We are in the ‘disrupt’ phase of generative AI right now, and we have some navigating to do,” Jenn Anderson-Miller, CEO and co-Founder of Audiosocket, told PYMNTS. “We call disruptions that because, initially, they are disruptive. And we have to level the playing field,” she added about AI in the music industry.

Ongoing AI-driven concerns came to a head with a recent open letter published in Billboard by the Artist Rights Alliance (ARA) calling for the ethical and responsible use of AI within the music industry while advocating for the rights of musicians, performers and songwriters.

“We believe that, when used responsibly, AI has enormous potential to advance human creativity and in a manner that enables the development and growth of new and exciting experiences for music fans everywhere,” the letter stated while noting that “unfortunately, some platforms and developers are employing AI to sabotage creativity and undermine artists, songwriters, musicians, and rightsholders.”

The letter’s over 200 signatories include music industry luminaries like Stevie Wonder, Robert Smith, Billie Eilish, Nicki Minaj, R.E.M., Peter Frampton, Jon Batiste, Katy Perry, Sheryl Crow, Smokey Robinson, the estates of Bob Marley and Frank Sinatra, Pearl Jam, Elvis Costello, Jon Bon Jovi, and many more.

Read more: Navigating AI Copyright Presents Challenges for Industry

Scraped Without Authorization

As AI technology continues to evolve, it is becoming clear that existing IP and copyright concepts, such as fair use, may need to adapt to effectively handle generative AI cases.

Audiosocket, which began about 15 years ago, was born out of a need to simplify the process of securing music licenses for various industries. The company was among the first to integrate AI into its operations, initially using it to help users find the right music for their media projects.

“I am confident that if artists and creators are at the table, helping to shape the narrative and terms of use, we will build equitable AI models that will unlock new opportunities,” Anderson-Miller said. “It will be really positive once we get the frameworks in place … but we need to come up with new frameworks.”

That’s because generative AI potentially empowers anyone to become a creator, but the lack of effective guardrails around the AI models’ training material, copyrighted or not, raises important questions around ownership of the output.

Audiosocket has a stake in the game because, as Anderson-Miller explained, the platform wants to be seen as a leader in developing standards and practices for attribution and compensation. Audiosocket has announced to its 3,000-plus indie artists that it will be adding an “AI clause” into its artist agreements, whereby Audiosocket will have a compulsory AI tier and an opt-in tier for generative AI opportunities.

Corralling AI’s Disruptive Nature

As society grapples with the implications of AI-generated content, it must strike a balance between protecting incentives for creators, ensuring the value of distribution, and fostering future innovation.

The ARA letter argued that AI is being used to sabotage creativity and replace human artists with AI-generated content, threatening their privacy, identities and ability to earn a fair income. This exploitation dilutes royalty pools and could have catastrophic effects on musicians and creators struggling to make ends meet.

The letter condemns the race to the bottom initiated by unchecked AI, devaluing artists’ work and preventing fair compensation. But it also spotlights a positive, collaborative and productive future.

“As strong as the language was in that letter, it was equally supportive. But the real call to action was ‘when used ethically and responsibly with the original authors at the table,’” said Anderson-Miller. “We very much are trying to come to the table with people that are innovating.”

People aren’t looking to diminish the value of human-made art; they’re excited to help it flourish, as are many artists who are already embracing AI tools, she explained.