AI Music Agreements need to address these 5 issues [Chris Castle]

YouTube’s new deal with UMG to explore music and AI is among the countless initiates attempting to make sense of and monetize AI. Attorney Chris Castle cuts through the noise to focus on five key issues that should be the starting point of every music AI discussion and deal.

by CHRIS CASTLE of Music Tech Policy

When you see Big Tech start to make Newspeak noises about wanting to license creative works for artificial intelligence, it’s well to remember a couple of facts about how they treat people, business practices that they don’t talk about at parties. Or to Congress.

Take their supply chain, particularly their manufacturing supply chain in China where some of all their products use slave labor. And the cobalt that goes into every battery powered device like your smartphone is obtained through the equally Newspeak “artisanal mining” otherwise known as impossibly poor children mining cobalt by clawing it out of the dirt with their bare hands. You know, “artisanal”. (Read Cobalt Red by Sid Kara for that story.). Not to mention the grotesque and parasitic waste of electricity and the resources that provide it whether they are crowding out the public investment in renewables or driving coal powered generators. They don’t talk about it because they feel entitled to all of it which is to be expected from that feeder school for the Silicon Valley elites built with blood money from the Central Pacific Railroad.

So when you sit down at the negotiating table with these people, this is who they really are. That realization tells you a few things, but it mainly tells you they simply cannot be trusted in either life choices or in business choices.

Universal has taken a real leadership role in the AI negotiations that has both respected their artists and songwriters and given teeth to the principles of the Human Artistry Campaign. First of all, the company has made it clear that they are going to support their artists and songwriters in having a meaningful seat at the table. They will not send their artists to the charnel house. The only artists who participate will be the artists who decide to participate–opt in rather than Google’s preferred “opt out” structure which relies on the abuse of various safe harbors at scale. 

It appears that until such time as both the artists and songwriters and Universal are comfortable with the integrity of the creative and business model of YouTube’s AI music suite of tools, there’s no deal. Negotiations presumably will continue so there may be at least a commercial frameworks. 

To that end, here are five points that might prove useful.

1. Artists and songwriters need to be at the table: One takeaway from the frozen mechanicals experience is how necessary it is for the creators to be included–not through an organization but actual individuals who speak for themselves and are not influenced by lobbyists.  Universal has proven that this is possible. This is a huge advancement in label-artist relations and publisher-writer relations, particularly because it’s obvious from the creators who stepped forward that these are articulate independent thinkers who are not going to tow the party line. That is the whole idea. If you don’t trust your artists and writers enough to give them freedom to speak their minds, then let’s face it–there’s something wrong with your business model.
2. All AI licenses should be opt in: Most of YouTube’s many artist relations issues arise from artists not having the right and ability to withhold their work from whatever the platform is. This is particularly true with UGC and advertising supported platforms. When you have poured out your soul in a recording that ends up with ads for drugs or miracle hair replacement treatments, it’s deflating and if anyone asked for approval, you’d probably decline. Which is why you negotiate marketing restrictions that prevent your music being used in advertising.
3. No blind check deals and no “big pool” royalties: We haven’t gotten to the royalty rates yet, but there will be riots in the streets if anyone tries to perpetuate YouTube-style accountings, the grotesquely unfair TikTok blind check deals or “big pool” market centric royalties. AI gives us all a chance to get it right and build a new system that is artist centric. It’s encouraging that Lucian Grainge’s blog post announcing the relationship with YouTube is entitled “An artist centric approach to AI innovation” which is consistent with his prior statements about making streaming royalties more fair.
4. Ability to track and account is a precondition: It should go without saying that in order to have meaningful royalty accounting, the service must have the ability to track and account. This is especially challenging in AI given the “training” issues. I will be pleasantly shocked if Google engineers designing the music AI tools have not entirely ignored tracking and accounting which they typically have viewed as a bug, not a feature. This is what gives rise to the blind check deals and other unworkable approaches which are most definitely not “artist centric.” Accordingly, the need to issue per work reports is essential.
5. Audits should be much more frequent: This new product is a chance to revisit the standard approaches to auditing which have unfortunately become perpetuated in digital deals and most prominently in the Music Modernization Act (Title I). There is not much difference between the MMA audit rights and the audit clause from a 30 year old record deal notwithstanding the vast difference in commerce between the two. With AI, not only have the DSPs blown up the album to a commercial singles world, they are now trying to blow up the single to mind-numbing fragmentation. Potentially, this world will be like selling stems. This ushers in a whole new need for minimum viable data laws and enforcement for using standard identifiers.

There will be many other issues to address, but I think if we don’t address these key points, we’ll find ourselves to be artisanal workers scratching out a living for ChatGPT.