00:00Hello and welcome to People & Profit. I'm Kate Moody. The technology of artificial intelligence
00:19is evolving rapidly and being integrated into nearly every walk of life. Creative professions
00:26are seen by many as being the most at risk. The music industry is among those sounding
00:31the alarm. Artists and creators are worried about the impact on their finances, as well
00:36as the human touch that helps them connect to their fans.
00:39Well, we're joined now by Klaus Goldthamer, Managing Director at Gold Media Consulting
00:44and Research Group, which has conducted a wide-reaching study on artificial intelligence
00:49in music. Thank you for being with us today. Your study suggests that the market for generative
00:54AI in the music industry will reach some $3 billion by 2028. It's a tenfold increase
01:01in just five years. Why are we seeing it growing so fast?
01:04Well, the answer is simple because people use it and the creative AI output is so astounding.
01:11So open AI alone made $3.7 billion in 2024 and is expected to make almost $12 billion
01:18in 2025. So this is impressive and it shows the market volume of AI models, which are
01:26all based on the creative works of composers, authors and other creative people.
01:32There's a downside to this, a potentially devastating impact for artists financially.
01:37Your study found a potential 27% drop in music creators' revenues by 2028. Can you explain
01:45why we're seeing that and what might be done to prevent or at least mitigate that?
01:50Well, we went through all the different tariffs and revenue streams of licensing entities
01:56and forecasted the revenues for the next five years without AI and with the impact of AI.
02:02So revenues from public concerts, for example, are unlikely to be affected, but background
02:08music or movie music is already replaced by AI-created music. So from this difference
02:15between what the revenues would be without any regulation and with regulation, we can
02:21calculate the massive impact AI has already on the music industry and especially on the
02:27creative people. And what can be done? Well, I guess it's some sort of regulation and licensing
02:34model which could improve the situation.
02:39A lot of artists are also worried about having their existing copyrighted music being used
02:45in AI training models, for example. Is that an area where they might be able to fight
02:49for a bit more control?
02:51Absolutely. There is a huge demand from authors and composers for consent, for a licensing
03:01scheme, for a fair remuneration. And it's all based on the demand that there should
03:08be a political solution to this problem. And it could all affect the situation of authors
03:15and composers in a much positive way.
03:20And there are also some real potential benefits here. Can you talk us through what kind of
03:24opportunities you would see from being able to use AI in this creative process?
03:31Well, AI is already a profound tool for many musicians. So, in our research, we found that
03:39almost one third of authors and composers already use AI models for their musical work
03:46and their creative work. And this shows that the creative people are open to AI models
03:53to use them and to take advantage of some ideas and some thoughts that they can derive
04:01from these models. But at the same time, the people are in fear of losing their livelihood
04:12towards AI models. And this is a profound problem.
04:18And that's true for other creative professions as well. It's not just the music industry.
04:23Not only for creative profession, but also for lawyers or doctors and many other journalists,
04:30for example. And they all are affected by AI models in a very serious way.
04:36Yes, I can assure you that journalists are certainly keeping a very close eye on what
04:40AI can do. Tell me a bit about where things stand in terms of regulation. Are some regions
04:47of the world taking action to protect their creators faster than others?
04:52Well, yes. On the one hand, some of the AI model operators are now sued by the music
05:02industry. This is the one step. But I think the German licensing body EMA has now proposed
05:10a new licensing model. It's a two-column model. And I think it's the first licensing scheme
05:18in the world. So the idea is that column one is a remuneration scheme of 30% of the revenues
05:24from the AI providers. And the other column is about the revenues which are made from
05:29the AI-generated output. So if you propose or if you produce an AI-generated song that
05:38becomes very successful, then this can be also licensed or this can also be eligible
05:46to licensing B2 to the GEMA.
05:51Artificial intelligence certainly isn't the only thing that's changing in the music industry
05:55at the moment. Klaus, stay with us for a moment, if you will, while we take a look at a phenomenon
05:59that really hit fans of live music around the world this year. And that's the surge
06:03of dynamic pricing for concert tickets. With artists making less and less from album royalties
06:09and streaming, many are relying more on revenue from tours. And that's putting pressure on
06:15would-be concertgoers. Aurore Cloé Dupree has the story.
06:23Fans had been waiting for this for 15 years. Oasis finally reunited. But their excitement
06:31soon turned into frustration as they queued for hours online only to find out that prices
06:38had soared.
06:39Instead of it being 150 pounds, which is already quite expensive for a ticket, it was asking
06:44for 350 pounds for a standing ticket.
06:48The process of buying concert tickets has become absolutely ridiculous.
06:55It's called dynamic pricing. Prices aren't fixed, they are adjusted, often using algorithms.
07:02The higher the demand, the higher the price.
07:06Dynamic pricing is something that we, I think, are all quite familiar with, whether it's
07:10sort of airlines or hotel rooms or train tickets or Uber surges. But I think we haven't really
07:16seen it so much before maybe in concert tickets in this country.
07:21The UK and the EU Commission are now investigating Ticketmaster. The US-owned ticket giant insists
07:28that prices are set by artists and their management. Oasis announced it would abandon the practice
07:34for the North American leg of its tour.
07:38Other artists like Taylor Swift and Ed Sheeran are now taking a stance against dynamic pricing.
07:45But according to financial analysts, this trend might not last very long. Since the
07:49Covid pandemic, many consumers are adopting a YOLO attitude, saying they're ready to fork
07:55out a lot of cash to see their favourite artist.
08:03Klaus Goldheimer, thanks for staying with us. What's your take on this shift? Could
08:08attending concerts become out of reach for many fans? And is there anything to be done
08:12about that?
08:13No, I don't think so. I personally have been waiting for dynamic pricing for a long time.
08:19It's well known in tourism, for example. And there is a high willingness to pay for a concert
08:26or for your favourite artist. And at the same time, there's this thing called the second
08:31market. And so people are buying tickets very cheaply and selling them on the second market
08:37for a very high price. So this idea of dynamic pricing is a much better way to sell tickets
08:46to everybody and according to their willingness to pay. And as musicians rely heavily on the
08:52revenues from concerts, I think it's better for them to to get the willingness to pay
08:57from from their from their fans on a fair level and not on the second market.
09:04And is that only true for big global stars? What about smaller acts who are also being
09:11impacted by this shift in the way that tickets are sold?
09:15I think it's also I think it also applies to to to smaller stars or local local musicians,
09:24because you can implement dynamic pricing on lower scales as well. And once again, for
09:32the musicians, it's a it's a better way to generate more revenue from their concerts
09:37and they need that and they can exclude the secondary market. And so in overall, it's
09:45a better solution, I think. And at the same time, if the prices would be too high, nobody
09:50would go to the concert anymore. So it has to be a fair and and attractive method. Otherwise
09:58people wouldn't wouldn't do it. There has been a really huge change in the
10:03past, let's say, two decades or so with the shift to streaming services. In your opinion,
10:08what's the next big revolution for the music industry? Are you expecting changes in terms
10:12of the way we consume music? Well, I think we are in the midst of the very,
10:20very profound revolution, which is AI. And this is not over yet. So my idea of the of
10:29a big revolution to come is when an AI generated artist will have an AI generated song becoming
10:39the number one hit in the world. And I'm waiting for this to come in the first time.
10:46Anywhere in particular that we should be looking out for that? Do you think a specific genre?
10:51Probably it's pop music. Anything else has been done already. So so classical music has
11:00has has had its AI moments and even the Beatles songs had their AI moments. I'm waiting for
11:07something completely generated from artificial intelligence becoming the number one hit in
11:13the world. We'll keep an eye on the top of the charts
11:15then. Klaus Goldhammer, thank you so much for joining us today on People & Profit. Well,
11:20that's all for now. Don't forget to look for People & Profit on the podcast platform of
11:23your choice or as always on the France 24 website. Until next time, thanks for watching.
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