Article 13 hits online platforms: how AI & generative music technology can tackle copyright issue for big companies

Alex Kochetkov, founder and CEO of Mubert, first generative music streaming service, reflects on the copyright issue of social media and shares his thoughts on why AI is a solution for large brands. 

October 1, 2019

The presence of streaming services has eliminated a need of going to movie theaters or concerts. Content consumers enjoy the abundance of offerings by Spotify, Netflix or others. Platforms such as Instagram and Snapchat roll out new solutions for making stories more exciting and easily sharable across the globe. The content streaming era has changed the lives of ordinary people and the dwellers of the music industry. However, the positivity of this change in the context of musicians, record labels and streaming services themselves is very much questioned. The issue of copyright policies and royalties is a sword of Damocles hanging above the relationship between content producers and large brands that provide it. 

Copyright problem: the US perspective 

From the very inception of streaming services, their business model did not allow for accurate payments to rightsholders. Services like Spotify were liable to pay between $750 and $15,000 of statutory damages to each song streamed without a license. Numerous lawsuits and million-dollar losses resulted in ultimate drama. At the beginning of 2018, the US Copyright Royalty Board (CRB) issued a decision to increase royalties Apple Music, Spotify and myriad of minor services had to pay to the musicians and publishers. CRB’s 2018-2022 mechanical statutory rates imply an increase from 10,5% up to 15,1% of revenue. 

For all streaming services who seek for solutions we made our music API

While celebs felt relieved and celebrated a bit of justice, streaming services announced they were not going for this by no means. Amazon, Spotify, Pandora, and Google expressed their intention to appeal those determinations. The new statute rates were supported by the National Music Publishers Association (NMPA) — there was a hope that the ice would finally melt and everyone could be happy. And that hope was shattered when streaming monsters decided to sue composers and songwriters and cut their revenues by three times. By the way, Apple Music appeared to be the only brand to accept new regulations which was appreciated by the musicians. 

So: are those appeals a surprise? Nope. Does the war between big tech and music continue? Definitely. The point is, the chosen military strategy is not a win-win for everyone. Let’s move to another continent and see if things are any different there. 

Alexey Kochetkov, Founder & CEO of Mubert

Alexey Kochetkov, Founder & CEO of Mubert

The European response: Article 13 

The years of debates over the copyright problem resulted in the European Parliament issuing its own directive. Needless to say, it has sparked even more debates due to its controversial nature. On April 15, the European Council voted for the adoption of the copyright directive passed from the European Parliament. Except for 19 states that voted for the directive, Sweden, Poland, Netherlands, Luxembourg, Italy, and Finland voted against it. Slovenia, Belgium, and Estonia preferred to remain neutral and abstain from voting. From the Polish Prime Minister’s point of view, for instance, the directive is all about threats to freedom of expression and censorship. But seriously — is that so?

Article 13 is the directive aimed at limited content sharing on online platforms. To be more specific, online services are required to delete copyrighted content. Thus, becoming liable to infringements shifts the center of gravity towards the creators’ side — so that artists can get their deserved revenue. It is not hard to guess what the reaction of Facebook, Google, Netflix, Amazon, eBay, and all the streaming services was. Tech giants didn’t hesitate to massively criticize the Article 13 directive, claiming, that it will kill innovation, inhibit the exchange of information, impede economic growth. While media and music organizations, the Society of Authors clap their hands, streaming services that have become creative hubs for millions of people will be wrecked. 

All in all, the regulatory approach to the relationship between content creators and its providers simply does not work. Acknowledgment of the artists, their talent and work will put a lot of pressure on the streaming industry. And what I mean by pressure is that commitment to huge royalties is incompatible with their life. Content consumption might change its patterns in the way quite hard to imagine. Which is why some platforms seek solutions in another direction — where technologies are. 

Why TikTok acquired Jukedeck?

At the end of hot July, tech media was bombarded with the news that TikTok and ByteDance company behind the project acquired Jukebox, the UK-based startup. The bright-minded brits are specialized in the development of AI-generated music software. Well, we all know what TikTok is about: the project is intended for short-form videos synced to music. Historically, TikTok has been busy trying to address all the licensing and copyright issues. So basically what happened is TikTok realized the perks and opportunities provided by generative music — the one that is created by algorithms. First and foremost, generative music is royalty-free and platforms can rest easy and forget about huge losses. Secondly, users receive unparalleled user experience and more creative control. 

Copyright © Tiktok

Copyright © Tiktok

How about Snapchat and Instagram?

Snapchat has spent some time negotiation with Universal Music Group, Warner Music Group, and Sony Music Entertainment looking for appropriate options for embedding licensed music into videos. As a result, users would acquire access to massive music catalogs to make their posts more fun. In this case, we are talking about a certain licensing deal, which looks like the one Facebook secured back in 2018. Last year, Zuckerberg’s brainchild concluded agreements with the three record labels so that its users can post licensed music. This also pertains to Messenger, Oculus, and Instagram. So if you are an independent musician or publisher, it is ok for you to hate Facebook. Because the payouts are not based on actual plays. 

Again, these deals imply dozens of millions of dollars for the platforms. The problem that has been around for years is still not addressed — as far as profitability and cost-effectiveness of these companies are concerned. Mubert streaming service has been among the top of the App Store for some time, as it has provided the infrastructure capable of satisfying all the stakeholders — whether you are a student, a business owner or a sound producer with a challenge to win your own niche in the market. The developers took another approach to present on-demand solution for online services such as Snapchat and Instagram.

Zen 8: Music for Stories by Mubert Inc

Zen 8: Music for Stories by Mubert Inc

Zen 8 is a standalone application designed especially for stories. The looped music is a never-ending playlist compiled by AI algorithms. Users can create their stories and add exclusive and personalized musical accompaniment. The difference between Zen 8 and other products is quality: the technology serves as a conductor who works with huge database of human-made sounds. It orchestrates those sounds, patterns and assembles to the stream which a user wants here and now, in certain circumstances. The app generates music in all modern genres. Moreover, the app developers cared a lot about its aesthetical looks and easiness of use — four steps are enough to hear unique music background in stories. 

Music is crucial to user experience, and it influences the client’s decision to stay or run away — it’s an axiom. At the very same time, functional music or muzak is on the rise, and AI-based projects will be mushrooming at a fast pace. Business owners will be business owners: they will always seek ways to cut costs and be profitable. An ability to have no compromise for the quality will be a success differentiator, and big brands will focus on those who make their products ethically. 

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