CMU Digest is a weekly round-up of essentially the most fascinating music enterprise information tales from the final seven days.
This week: SXSW introduced it was ditching its ‘problematic’ sponsors, however what about its way more problematic ties to Saudi Arabian cash? The report business’s first huge authorized battle with music AI begins as the most important report firms sue Suno and Udio. PRS has been sued by a gaggle of its personal songwriter members who say it places in place “unreasonable and pointless hurdles” after they attempt to instantly license reside performances of their songs. Extra Hipgnosis dramas amid hypothesis that hedge funds might be about to journey up Blackstone’s deal to accumulate Hipgnosis Songs Fund. And much extra music AI information involving YouTube, Anthropic, AI:OK, Stability and Apple.
ICMYI: EU confirms that Apple’s amended app guidelines nonetheless don’t adjust to Digital Markets Act; decide says Kneecap can take authorized motion in opposition to UK authorities; Reside Nation boss Michael Rapino sued by shareholder over DoJ motion; KKR acquires Superstruct; Imagine shareholders resoundingly assist founder’s “amicable buy-back”
Additionally this week: MIA says $100 tin foil hat is a “necessity” however will it make Diplo comfortable?
Having the US army as a sponsor – and permitting weapons firms to be concerned in its convention – brought about controversy at this yr’s version of SXSW’s Austin showcase pageant. After a boycott by artists, and though it beforehand defended its companions, this week SXSW mentioned it had “revised” its sponsorship mannequin and “because of this, the US Military, and firms who have interaction in weapons manufacturing, is not going to be sponsors of SXSW 2025”.
The transfer was extensively welcomed, though, as a CMU report identified, SXSW nonetheless has problematic backers. The pageant’s majority proprietor, Penske Media Company, has acquired a whole lot of thousands and thousands of {dollars} from the Saudi Analysis and Media Group, a media firm carefully related to the Saudi royal household and crown prince Mohammad bin Salman or ‘MBS’.
MBS is greatest recognized for – in keeping with US intelligence – ordering the homicide and dismemberment of journalist Jamal Khashoggi, a distinguished critic of the Saudi regime. Saudi Arabia constantly comes near the underside of the varied indices that monitor human rights and freedom around the globe.
In the meantime, SXSW’s new London version is being pulled collectively by Ali Munir, a director of Penske, and previously Terra Firma’s ‘man within the Center East’. For some purpose Munir has licensed the SXSW model through an offshore firm in Jersey, a notoriously opaque jurisdiction.
Munir has beforehand waxed lyrical concerning the “shiny prospects for the personal fairness business in Saudi Arabia”, and is the son-in-law of the proprietor of considered one of Saudi Arabia’s most profitable funding banks. SXSW London’s PR agency, Freud Communications – which has beforehand labored for the Saudi authorities – claims that there isn’t any Saudi cash in SXSW London, however can’t present any proof to again that up.
The most important report firms are suing AI music platforms Suno and Udio
In a lawsuit coordinated by the RIAA, the labels mentioned each AI companies have educated their generative AI fashions with current music with out getting permission, and are due to this fact answerable for copyright infringement. “AI firms, like all different enterprises, should abide by the legal guidelines that defend human creativity and ingenuity”, the lawsuit said.
Though each Suno and Udio have been imprecise about what music they’ve used to coach their fashions, the lawsuit mentioned it was clear they’ve used giant portions of commercially launched tracks. Customers can use Suno and Udio to generate “sound-a-likes of quite a few sound recordings”, and Suno even “left producer tags on their outputs”. Anticipating that each AI firms will declare coaching AI fashions with current music is ‘honest use’ underneath US regulation – that means permission isn’t required – the labels insisted that defence doesn’t apply.
Responding, Suno CEO Mikey Shulman accused the labels of reverting to their “previous lawyer-led playbook”, referencing the lawsuits filed by the report business within the early days of file-sharing. Udio revealed a weblog publish insisting their know-how listens to slightly than copies current music. Each additionally argued that their goal is to allow extra music-making. The RIAA was scathing about each responses, insisting that “supporting actual creativity means getting permission earlier than utilizing somebody’s work”.
A gaggle of songwriters are suing PRS over its method to the direct licensing of reside music
When songs are carried out reside, often the promoter of the present will get a licence protecting the performing rights in these songs from a gathering society, so PRS within the UK. Nonetheless, some songwriters pull out of the collective licensing system in some situations, often round their very own reveals, in order that the promoter has to do a deal instantly with the author.
A gaggle of writers – together with King Crimson founder Robert Fripp and two members of the Jesus & Mary Chain – say that after they go that route, PRS places in place “unreasonable and pointless hurdles” which provides to the complexity of using direct licensing. That, their lawsuit argues, is to discourage writers from instantly licensing reside performances.
The lawsuit additionally criticises PRS’s Main Reside Live performance Service, which is obtainable to PRS member artists who play reveals with a capability over 5000. The scheme makes the licensing of reveals by means of the collective licensing system extra environment friendly. However the lawsuit says PRS, as a gathering society, shouldn’t be giving essentially the most profitable artists preferential therapy.
Hedge funds might be about to journey up Blackstone’s deal to accumulate Hipgnosis Songs Fund
Latest transactions involving quite a lot of hedge funds might be about so as to add one other dramatic twist to the funding agency’s plan to accumulate Hipgnosis Songs Fund, or SONG. Having fought off rival bidder Harmony, it seemed like Blackstone’s deal to accumulate SONG was a completed deal. It appeared like the whole lot was heading in the right direction for its acquisition to be accomplished as a ‘scheme of association’, making it simpler to take 100% management of SONG – particularly after Blackstone discovered a number of million {dollars} spare to assist sweeten the provide.
Nonetheless, regardless of that sweetener quite a lot of hedge funds have been shopping for up SONG shares in latest weeks, usually at costs inside a hair’s breadth of the $1.31 provide value. Consequently, practically 35% of SONG shares ended up within the management of simply 4 hedge fund buyers, resulting in hypothesis that these funds have been hoping to squeeze extra money out of Blackstone. In response, Blackstone’s Lyra BidCo – the corporate that can purchase SONG – was compelled to subject an announcement making it clear that there could be no extra money on the desk, and its $1.31 provide was “closing, and won’t be elevated”. Regardless of that, some hedge funds have nonetheless continued to purchase up shares – with TIG snapping up one other 2 million, and Glazer shopping for 3 million extra – growing hypothesis that the deal may falter.
This could all grow to be clearer on 8 Jul when essential conferences to find out the success of Blackstone’s provide will happen – however that also leaves a full week of buying and selling days vast open, and it’s removed from clear what the hedge funds’ finish recreation is perhaps. With varied choices on the desk, it’s starting to appear to be the short and clear scheme of association may falter – after which it’s anybody’s wager what would possibly occur. Worst case situation for Blackstone is the entire deal falls aside. The query is: would that even be the worst case situation for the hedge fund buyers – or may that be precisely what they’re playing on?
It’s been an enormous week for AI developments, together with information from YouTube, Anthropic, AI:OK, Stability and Apple
It was reported that YouTube is in talks with all three main report firms concerning the subsequent section in its AI experiments. It desires to construct on its Dream Observe pilot, which concerned ten artists, and permits YouTube creators to make use of AI to generate vocals that imitate these artists. Sources say that YouTube is now providing lump sum funds to attempt to get dozens of main label artists to collaborate in its subsequent generative AI mission.
Common Music has beforehand counseled YouTube for working with the music business on its generative AI experiments, slightly than utilizing current music to coach AI fashions with out permission. Not like, say, Anthropic, which is accused by the music publishers of coaching its chatbot Claude with their lyrics with out permission. They filed a lawsuit in opposition to the AI firm in Tennessee, however this week a decide mentioned the authorized battle needs to be fought in California.
The music business is eager to encourage AI firms to work with report labels and music publishers, partly by suing (or threatening to sue) those that don’t, but additionally by championing those who do. This week a brand new scheme was launched known as AI:OK which seeks to establish what constitutes the accountable use of music in AI – and AI in music – and to kitemark the businesses and platforms that meet these standards.
Elsewhere in AI associated tales this week, Stability introduced a brand new spherical of funding and the appointment of Napster co-founder and early Spotify advisor Sean Parker as Chair, and Apple mentioned that guidelines within the EU’s Digital Markets Act will delay the roll out of a few of its new options in Europe, together with generative AI instrument Apple Intelligence.
ICYMI:
🍎 The European Fee has revealed particulars of why it thinks that Apple’s App Retailer guidelines are nonetheless not compliant with the European Union’s Digital Markets Act. It particularly focuses on the foundations across the sign-posting of different fee choices inside iOS apps, one thing that Spotify has been significantly vocal about. “Our preliminary place is that Apple doesn’t absolutely permit steering”, says Margrethe Vestager, the Fee’s EVP accountable for competitors coverage. Apple modified its guidelines in order that builders are allowed to sign-post customers in the direction of various fee choices. Nonetheless, there are restrictions on how that works, and Apple at the moment expenses a 12-27% fee on any purchases that start with a hyperlink in an iOS app.
🦵 Belfast rappers Kneecap have secured permission from the excessive courtroom to take authorized motion in opposition to the UK authorities over its blocking of a grant from the Music Export Development Scheme. Kneecap member DJ Próvaí insisted that the band’s authorized motion was not concerning the cash they misplaced when their grant was blocked, however the precept of the federal government’s conduct. The federal government’s resolution, he mentioned, was “an assault on inventive tradition, an assault on the Good Friday Settlement and an assault on us and our manner of expressing ourselves”. It emerged earlier this yr that Kneecap’s software for MEGS funding had been authorized by a music business panel however then blocked by the division of Enterprise Secretary Kemi Badenoch, seemingly due to the group’s political opinions. The group’s lawyer Darragh Mackin mentioned this week that Badenoch’s intervention to dam the grant was an assault on identification, freedom of expression and the basics of the Good Friday Settlement.
🤡 A Reside Nation investor has sued members of the reside large’s board – together with CEO Michael Rapino and CFO Joe Berchtold – in response to the latest submitting of authorized motion in opposition to the corporate by the US Division Of Justice. The federal government division accuses Reside Nation and its Ticketmaster subsidiary of anticompetitive conduct, and has requested the courtroom to power Reside Nation to dump the Ticketmaster enterprise it acquired again in 2010. The federal government’s authorized motion, shareholder John Williams claims, will “severely injury and injure” Reside Nation and its shareholders. That is the fault of the board members, Williams alleges, as a result of following the Reside Nation/Ticketmaster merger they “continued to trigger Reside Nation to interact in anticompetitive conduct” in “defiance” of a consent decree agreed with the DoJ.
💸 Competition operator Superstruct has been acquired by funding agency KKR. Monetary phrases of the deal will not be recognized, however the enterprise was estimated to be valued at £1.5 billion earlier this yr. Based by fairness agency Windfall and Cream founder and former Reside Nation exec James Barton in 2017, Superstruct runs festivals together with Sonar, Benicàssim, Sziget, Bluedot and Boardmasters. In a joint assertion, KKR companions Philipp Freise and Franziska Kayser mentioned Superstruct has established itself as “a frontrunner in delivering unparalleled reside music experiences globally”. Superstruct’s portfolio of occasions now consists of 80 music festivals throughout 9 European international locations and Australia, giving them a possible attain of practically seven million attendees.
🇫🇷 A consortium led by founder Denis Ladegaillerie has accomplished an “amicable buyback” of Imagine shares, with an “overwhelming” majority of shareholders tendering at €15 per share. Upbeat BidCo, fashioned for the takeover, now holds 94.99% of Imagine’s shares and “not less than” 94.29% of voting rights. Regardless of potential for a squeeze-out, Upbeat opted in opposition to obligatory motion, permitting minority shareholders to retain their stakes. Nonetheless, with tradable shares falling beneath 15%, Imagine faces removing from sure inventory indices, limiting liquidity. The exit of earlier investor Ventech, which secured a 36x return on its €175 million funding, marks France’s largest VC exit in a decade.
🎙 Setlist podcast: AI lawsuit warns of “devastating impacts” on human creativity
On this week’s Setlist Podcast: Chris Cooke and Andy Malt talk about the launch of the report business’s first main lawsuits in opposition to music-generating AI firms – with the RIAA coordinating litigation in opposition to Suno and Udio – plus a gaggle of songwriters are suing PRS.
🎧 Click on right here to pay attention – or seek for ‘Setlist Podcast’
And Lastly! Would you purchase MIA’s $100 tin foil hat?
Are you uninterested in folks laughing at your selfmade tin foil hat whenever you come out to replenish on cans of beans? Nicely, don’t fear, MIA has you coated. Actually. She’s simply launched a variety of streetwear for the doomsday prepper who additionally desires to look good.
Beneath the model identify Ohmni, gadgets on provide embody “the tin foil hat you’ve been ready for” (a silver bucket hat with copper lining), a “full protect” t-shirt, a “full safety poncho”, “efficiency denims” (simply the crotch space protected, to cease 5G making you infertile), “efficiency boxer shorts” (simply to be additional positive), and a “knowledge safety” bag.
That ensemble will set you again $950. And that’s earlier than you’ve acquired a knowledge blocking telephone case to can help you go off grid at any second. I’m joking, in fact. The again pocket of the denims is lined with a faraday cage, so that you don’t want to purchase the telephone case.
👉 Learn the total story and extra of this week’s funniest music information
