AI and the future of music The future is already here

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20,000 foot view:  Unlike most new technology hype cycles, the impact that artificial intelligence (AI) has on the world is already surpassing expectations. Within the music industry, AI will largely be an enabler and accelerant of already-existing trends and market shifts: the growth of self-releasing artists, the consumerisation of music-making, and the resulting oversaturation and hyper-fragmentation of the market. These shifts will elevate fandom as the differentiator, and push labels to reposition themselves as fandom drivers. How the music industry responds to copyright concerns will have profound implications — at best, AI could unearth a new set of revenue opportunities for rights holders.

Key insights 

• Half of music creators believe AI can be a useful tool for making music, while a quarter are neutral on the matter
• AI will consumerise music-making tools, driving a quantum leap in music output
• As AI accelerates the oversaturation and hyper-fragmentation of the music market, as well as the blurring of lines between creators and consumers, the ability to cultivate fandom will become the ultimate differentiator
• AI does not have to generate great music to erode major labels’ market share; it only needs to generate enough songs with one stream each
• As AI tools take over creators’ needs, from administration (i.e., scheduling, drawing up contracts) to creative (i.e., developing marketing campaigns), record labels will need to reposition their value around artist development and driving fandom 
• AI will support both passive and active music streaming, but lean more heavily to passive
• If embraced, AI could unearth an entirely new set of licensing opportunities for recorded music, from licensing proprietary datasets to consumer-creation tools

Companies and brands mentioned in this report: Aespa, Arca, Avid, ChatGPT, CoSo, Discover Mode, Drake, Fiverr, Holly Herndon, HYBE, iZotope, K/DA, KINGSHIP, LANDR, League of Legends, MasterClass, MAVE, Mubert, , NASA, Netflix, Neutron, Never Before Heard Sounds, SM Entertainment, Snapchat, SoundCloud, Soundful, Splice, Spotify, Teflon, Tencent Music Entertainment, TikTok, Universal Music Group, Voltaire, The Weeknd