Fix your music data. Find your royalties.

For all the noise around AI over the past year- new models, new capabilities, new fear- the most important developments haven’t been technical, but structural. In recent months, the UK government has tried to start defining an approach to one of the most consequential economic questions of the next decade: How do you build a world-leading AI sector without undermining the value of the content it depends on?

Everyone in publishing knows the simple truth- there shouldn’t be missing royalties in the digital age and there is a tax to identifying and retrieving them. The explosion in the number of recordings being released and songs being registered is still stretching the system- leaving billions in royalties that remain unclaimed or misallocated ($196m at The MLC minimum at the time of writing). If optimising royalties has a necessary cost, it begs a nuanced question: who should f

Since The MLC’s inception in 2018 through to the start of its start of distributions in 2021 and beyond it has been closely watched- by the market at large, by key stake holding publishers and by compatriot CMOs the world over. from next year there is to be a material change in how monies are distributed- Pro-rata payouts

As we all know, the conversation around music catalog investments has become increasingly sophisticated as the asset class has matured. The ability to identify, administer, and ultimately collect the income attached to rights is a deep specialism- and one that cannot be synthesized or sidestepped by AI.

In the past month alone we’ve seen three announcements that are as fascinating individually as they are illustrative collectively. Primary Wave in talks to acquire Kobalt. BMG reportedly exploring a deal for Concord. The now-concluded acquisition of Downtown by Universal Music Group Each headline by itself is significant, but taken together they suggest something more structural is currently at play. A re-majorisation of the music business.

There was a moment, not that long ago, when music rights acquisitions felt almost mechanical- streaming growth was steady, capital was abundant. The underwriting conversation revolved around a small set of variables: historical cashflow, growth assumptions, discount rate, and multiple. If you believed in the long-term durability and expansion of streaming, the rest followed.

On Spotify’s latest earnings call, there was a few moments, including the quote “Technology is seldom disruptive on its own. Significant disruption happens when new technologies enable new asymmetric business models.” The real question isn’t whether AI is powerful, but whether it enables new business models entirely.

Music rights are nuanced, and always have been. Creative collaboration, shared ownership, territorial differences, long tails of value, and cultural context are all part of what makes music operationally distinct from many other industries. There is, however, an important distinction to be made between nuance and friction.

“We are a defacto data company. We don’t work in the music industry-  we work in the data industry.” This quote from Caroline Champarnaud of SACEM speaks deeply to the operational reality of a modern collecting society- though it resonates far beyond that context, into the very fabric of music publishing and copyright administration in the modern age. The more I’ve thought about it since, the more it feels like an accurate description of the publishing ecosystem.

Last week I was at Music Ally Connect in London- and as you can well imagine AI took it’s usual place as the topic du jour. Despite being well trodden ground there was some fascinating elements- both trends from the day at large and specific comments that gave insight to how the Music industry is currently both thinking about and preparing for (/guarding against) AI. Mostly these broadly fell into 3 camps- intense negativity, bullish positivity and cautious ambivalence.