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How do we harness AI to drive exponentially more value?

By Tracy Maddux, Chief Commercial Officer, Downtown Music Holdings (and ex-CEO of CD Baby, 2010-2020) April 11, 2023

How do we harness AI to drive exponentially more value toward the creators and rights holders?

I’m seeing a lot of conversations out there about the future of AI in music. Many of these are fear-based, and justifiably so. The music industry has been hugely disrupted by technology in the past and only in the past few years is emerging from a long period of decline brought on by Napster and format shifts at the turn of the century.

When I think about the size of the industry at less than $50 billion in worldwide annual revenues (excluding touring and merch), it really is tiny. In comparison baked goods, you know, croissants and muffins, that’s a half a trillion per year industry. Croissants 10x as valuable as music!? Mon Dieu! Technology has been a factor in keeping the music industry small. Unlike croissants, the variable cost of a stream is approaching zero.

(...) On an inflation adjusted basis, music is getting much cheaper to consume. The same $9.99 per month Spotify subscription you signed up for in 2011 costs about $8 today in inflation adjusted dollars, even lower when you consider the proliferation of family plans.

(...) When (WMR CEO Robert) Kyncl stated publicly a week ago that he’d like to start experimenting with royalty models that reward the creators (artists, songwriters) who drive demand rather than passively generate it, I thought he might be onto something. (...) But crowdsourcing higher revenue share rates based on the popularity of artistic expression has a lot of merit.


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