Welcome to the weekly music business digest from CMU | Every Saturday we send a summary of five key music business stories from the past week, plus the latest edition of CMU's Setlist Podcast as well as other popular stories from CMU over the past couple of weeks. Click through to read each story in full. | This week: Spotify cuts 17% of its workforce; MVT calls for a compulsory ticket levy; Norwegian Supreme Court copyright ruling could have "dire consequences"; IMPALA suggest pause to Spotify changes; US recording industry says AI training "rarely, if ever" fair use. | | |
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Spotify announced job cuts that will impact on 17% of its global workforce - about 1500 people | |
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It's the third round of downsizing at the streaming company this year and by far the most dramatic. CEO Daniel Ek said that the cutbacks were necessary because "economic growth has slowed dramatically and capital has become more expensive". Certainly investors have been putting pressure on Spotify to demonstrate that it has a solid strategy for becoming a profitable business. The company's share price increased following the announcement, although is still a long way off its 2021 peak. An update to investors also revealed that the cutbacks will cost the company up to €145 million but, it said, they will then "generate meaningful operating efficiencies going forward".
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| | The Music Venue Trust called on UK lawmakers to consider a compulsory ticket levy on large-scale shows in order to support grassroots venues | |
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The call came as another venue announced its closure, this time Moles in Bath, which had been in operation for 45 years. The venue's management said that the current cost of living crisis had "crippled the grassroots music sector”. MVT has been trying to persuade the music industry to sign up to a voluntary scheme where a levy on tickets for big shows could support grassroots venues, which play an important role in the talent pipeline. Although some artists, venues, promoters and ticketing firms have embraced that proposal, many have not. Which is why the trade group is now proposing that the UK should follow France's lead and introduce a compulsory levy.
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| | The Norwegian Supreme Court was criticised over a big copyright ruling | |
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The group of music publishers accuse Anthropic of using their lyrics without permission when training its AI chatbot Claude, which - they claim - constitutes copyright infringement. Anthropic will ultimately argue that using lyrics in that way constitutes 'fair use' under US copyright law. But for now it is focusing on the decision of the music companies to file their lawsuit in Nashville, Tennessee. It points out it is based in California, which is also where many of the other cases testing the copyright obligations of AI companies have been filed. With that in mind, it argues that Tennessee is the wrong jurisdiction for this dispute and the publishers' lawsuit should therefore be dismissed.
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| | IMPALA asked Spotify if it could delay planned changes to its business model to allow more debate | |
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We already knew Daryl Hall had secured an injunction against John Oates, but we didn't really know why because court documents in relation to the dispute were initially sealed. But we now know that the litigation relates to a plan by Oates to sell his share in the duo's joint venture company Whole Oats Enterprises to Primary Wave. Hall says that Oates negotiated a deal with Primary Wave in secret and without getting his permission, which violates the terms of their business partnership. This week the judge overseeing the case agreed to extend the injunction that is currently pausing any sale of Oates’ shares to Primary Wave while the musical collaborators go through an arbitration process.
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| | The US record industry said that the training of an AI model with existing music is "rarely, if ever, fair use" |
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| Three trade groups – the Recording Industry Association Of America, the American Association Of Independent Music and the Recording Academy - submitted a 'reply comment' as part of the ongoing inquiry into the impact of AI by the US Copyright Office. They hit back at suggestions by tech companies in earlier submissions to the inquiry that using music to train an AI model constitutes fair use under American law, which would mean AI firms do not need to get permission from or negotiate licensing deals with the music industry. The trade groups also disputed the suggestion that tech companies having to navigate copyright and secure licences to make use of existing content will stop the potential of AI from being realised.
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