October 16, 2024
Episode

The Generative AI Music Sweepstakes

The Generative AI Music Sweepstakes
Image credit:
Various sources. For specific credits, please contact us.

Powered by RedCircle

Listen to

This memo is brought to you by SymphonyOS.

Gaining traction is one of the hardest things for a creator or artist to do. How do you break through all the noise? Well, it’s a little easier when you work with the AI-powered marketing tools recently used by James Blake, Tinashe, Coi Leray, and Cash Cobain to grow their audiences.

That’s SymphonyOS. It’s built to empower today’s online businesses with the tech they need to grow. Think Canva, for marketing – It’s the operating system that has been tested for superstars and tailored for the next generation of indie artists and creators.

With SymphonyOS, you can run automated marketing campaigns on IG, YouTube, and TikTok, centralize your fan CRM with customizable data collection tools, and track fanbase analytics and insights.

SymphonyOS is used by teams at UnitedMasters, Range Media, Roc Nation, Interscope, The Orchard, and more. It’s trusted by 50,000 artists worldwide

Take your career to the next level and try SymphonyOS for free.

Today’s episode and memo is a deep dive into Suno, Udio, and generative AI music. These companies have raised a lot of money, captured attention, and raised several important questions. To break it all down,Tati Cirisano joined me from MIDiA Research.

This is a jam-packed ~30 min episode. You should listen to us here or read below for a few takeaways.

Permission, forgiveness, and incentives

Suno and Udio are the latest startups that reminded us of the inevitable decision that many businesses make. If your company is built to shake up an industry, is it better to ask for permission or forgiveness?

Startups operating in music face additional scrutiny from the industry given music’s turbulent history with disruptive technology. No executive wants to deal with another Napster. But Spotify and YouTube, two of the largest revenue contributors to recorded music, ruffled their fair share of feathers over the past twenty years. There’s nuance in those relationships.

But “playing nice” and asking for permission isn’t straightforward either. I’ve talked to many startup founders in music who try to do things the right way. They sometimes get ignored because they’re too small. Other times, the major labels want so much control that it would hinder growth.

If you’re a venture-backed founder, what sounds more attractive? Do things the right way, build slowly, and hope that the industry’s blessing pays off in the long run? Or take money from VCs with opinions that conflict with the copyright owners, especially when those same VCs have a track record of billion-dollar exits?

There are a handful of companies building in generative AI music that approached the opportunity with consent. But the two startups in this space that gained the most attention and funding are the ones that have raised questions. That’s not a coincidence.

This isn’t advocacy for breaking the rules. Instead, it’s a lens inside reality. Until the incentives shift, this dynamic will likely continue.

You can listen to the full episode here or read below for more highlights.

The royalty-free opportunity

Here’s a great quote from Expl.AI.nable’s Kevin Donnellan on the likely use case for these products:

“This community will deliver juvenile stuff like the above, and people creating musicial fan fiction where their favorite artist, against their will, continues to produce what they want. But it will mainly just be a replacement for royalty-free music with no clear path for earnings for anyone given how easy it is to create.”

We also discussed this in our episode. Companies like Epidemic Sound have reached unicorn status by selling access to royalty-free music and sound effects. That side of the music opportunity has gotten less airtime in the generative AI discussions but maybe the bigger area that products like this disrupt.

There’s huge demand for users of all levels for royalty-free music from users at all levels. From the creators who want background music for the b-roll during their TikTok videos, to the music supervisors who have a tight budget for their next project and need to get creative, there’s a market for Suno and Udio there.

Another similar area to disrupt is the beat marketplaces. In 2019, I bought the music and licensing rights for Trapital’s podcast intro and outro from one of those platforms. Would I need to do the same today, or would a free, generative AI music creation platform do the job?

A product or a feature?

I’ve tested out Udio, Suno, and Eleven Labs. The technology is cool and the use cases are quite broad. But are these products that will be the foundation of real businesses? Or are these product features that make more sense in an existing company?

If the inevitable focus is on helping music creators, how will these tools sompare with companies that already focus on that goal, like Splice or BandLab?

When Splice CEO Kakul Srivastava came on our show, she talked about how several users gave feedback that the company’s AI tools made its music creation too easy, so the company adjusted. If this is the same audience for these generative AI music tools, how does that line up?

But the audience may be more for the casual consumer. The industry has been eager for music to have its “Instagram moment” and see music evolve like photography has. But does that audience already live on social platforms like TikTok or DSPs like Spotify? What if those programs launch a similar tool?

We’re still early. We can be excited about the future of music but still ask the tough questions. Both can be true.

The FOMO is real

Water & Music’s Cherie Hu wrote about how Suno’s large round is a watershed moment:

“It not only reflects peak hype around generative AI, but also speaks to a new era of music-tech investment — moving beyond mass-market streaming into new opportunities for disruption around fandom, creativity, and artistry altogether.”

She’s right. For the past decade, the biggest music tech exits were mostly DSPs. Even Apple’s $3 billion acquisition of Beats Electronics fits that category. The headphones were still popular, but Apple wanted their nascent product, Beats Music, which became the foundation for Apple Music.

That watershed moment says a lot about the growth in music over the past decade, but also generative AI investing overall.

Here’s Fairly Trained’s Ed Newton-Rex on how Suno raised $125M:

I suspect the bigger driver of this investment is FOMO in the VC community. Most investors missed the opportunity to invest in OpenAI, who lead the pack in several AI verticals (music is the most obvious one they’re not in). Midjourney, the biggest AI image generation platform, has never needed venture capital investment, a fact that has many investors seething. They want to be in generative AI, but while there are lots of companies around, the unicorn hopefuls are few and far between. Enter AI music. Lagging around 18 months behind image generation, suddenly there are a couple of companies which, if you squint, could end up being the Midjourney of this space. They’ll certainly be saying they are in their pitch decks. If they manage it, the returns will be enormous – so the investor logic goes. So in flow the cheques.

This is real. Udio may have raised a relatively smaller round at $10 million, but I can guarantee that that bigger round is around the corner, and will likely happen for similar reasons.

Listen to the full episode for more on:

– the balance between innovation and regulation
– early use cases for Udio and Suno
– potential alignment with the gaming industry

Chartmetric stat of the week

NPR Tiny Desk is highly sought after and the numbers back it up. Since Ne-Yo’s April 26 performance, his Spotify monthly listeners have jumped from 35.8 to 37.4 million. Similarly, 311’s listeners have grown from 3 million on their March 11 concert date to over 4 million today. The concert series gets hundreds of pitches per week, and this is a big reason why.

Dan smiling at the camera against a dark background, wearing a blue shirt."
Dan Runcie
Founder of Trapital
Like this memo? Share it!
Subscribe to Trapital

"The stuff that Trapital puts out is fantastic. Really interesting insights into the industry, artists trends, and market trends."

Mike Weissman
Former CEO, SoundCloud

“You tell the true stories. Not just the end product, but how you get to the end product. Your point of view on it is dope.”

Steve Stoute
CEO, UnitedMasters and Translation

Read what the industry leaders read

Intersection of Hip-Hop + Business
Hip-hop mirrors the business world in a lot of ways. While I’ve always thought and known that, it’s great to see those ideas brought to life by someone so knowledgeable about both of those things. Huge fan of Trapital.
PPLS CHAMP
Perfect intersection of business and entertainment
Looking forward to future episodes of Trapital. I’ve been following the newsletters for awhile and always learn something new that’s relevant to hip hop and business. Great job getting the nuggets of info from Matthew Knowles on the 1st episode, can’t wait until the next one!
Cburns08
Phenomenal Podcast!
If you’re looking for a podcast with a wealth of info on the business of hip hop, then Trapital is your new home. Dan is an excellent host who has a myriad of of experienced guests to talk their role in the business of hip hop. Check it out!
RoyalSkegee
The best music business podcast
If you work in — or have an interest in — the music business, Trapital is a must.
Samu Rast
Subject Matter Expert on the Biz of Hip Hop
A good friend of mine put me on this podcast and it took me some time to tap in, but once I did, I couldn’t stop listening! Dan has a talent for pulling out the narratives between lines, connecting it to the culture and then making it make sense. I’m a loyal subscriber and am thankful for the podcast!
Zealous Advocate
Dan is such a great interviewer!
I am a real estate investor and came across this podcast after a recommendation from a friend who shares my loves for both hip hop and business. Often, those two interests have such polar opposite “voices” - but Dan’s podcast brings those two together for me. The result is magical. Great guests, too!
Gabriel Blue
Golden Age Goodness
As a guy who came up in NYC during the late 90s / early 2000s rap scene, I appreciate the history revisited by Dan, who obviously has an authentic and unique perspective on the culture. But he’s not only a hip hop historian; he’s also a visionary of art, technology and culture who curates other trend setters from across the globe. Salute!
Mrkamal
One of my fave podcasts hands down
I love Dan’s ability to bring diverse and timely perspectives to the show while asking deeply insightful questions that engage the audience on so many interesting levels. I’ve learned so much in just a short period of listening. Excited for what Dan has in store for the show in the future!
Greg0188
Great podcast! Keep it up!
I stumbled upon this podcast by learning about Dan / Trapital via LinkedIn. I listen to A LOT of podcasts and I decided to give it a listen. First, Dan has a calm and authentic demeanor, which are great qualities. When he’s talking to his guests it’s very conversational and easy flowing. I’m a former music industry vet so the topics are right up my alley.
Phil Stolaronek

Read what the industry leaders read

Hip-hop mirrors the business world in a lot of ways. While I’ve always thought and known that, it’s great to see those ideas brought to life by someone so knowledgeable about both of those things. Huge fan of Trapital.
PPLS CHAMP
Looking forward to future episodes of Trapital. I’ve been following the newsletters for awhile and always learn something new that’s relevant to hip hop and business. Great job getting the nuggets of info from Matthew Knowles on the 1st episode, can’t wait until the next one!
Cburns08
If you’re looking for a podcast with a wealth of info on the business of hip hop, then Trapital is your new home. Dan is an excellent host who has a myriad of of experienced guests to talk their role in the business of hip hop. Check it out!
RoyalSkegee
If you work in — or have an interest in — the music business, Trapital is a must.
Samu Rast
A good friend of mine put me on this podcast and it took me some time to tap in, but once I did, I couldn’t stop listening! Dan has a talent for pulling out the narratives between lines, connecting it to the culture and then making it make sense. I’m a loyal subscriber and am thankful for the podcast!
Zealous Advocate
I am a real estate investor and came across this podcast after a recommendation from a friend who shares my loves for both hip hop and business. Often, those two interests have such polar opposite “voices” - but Dan’s podcast brings those two together for me. The result is magical. Great guests, too!
Gabriel Blue
As a guy who came up in NYC during the late 90s / early 2000s rap scene, I appreciate the history revisited by Dan, who obviously has an authentic and unique perspective on the culture. But he’s not only a hip hop historian; he’s also a visionary of art, technology and culture who curates other trend setters from across the globe. Salute!
Mrkamal
I love Dan’s ability to bring diverse and timely perspectives to the show while asking deeply insightful questions that engage the audience on so many interesting levels. I’ve learned so much in just a short period of listening. Excited for what Dan has in store for the show in the future!
Greg0188
I stumbled upon this podcast by learning about Dan / Trapital via LinkedIn. I listen to A LOT of podcasts and I decided to give it a listen. First, Dan has a calm and authentic demeanor, which are great qualities. When he’s talking to his guests it’s very conversational and easy flowing. I’m a former music industry vet so the topics are right up my alley.
Phil Stolaronek
Dan sitting at a table with others, smiling and engaged in a discussion, with glasses and a water pitcher on the table.

Join readers who stay ahead of all the trends