CISAC report reveals AI-generated music will have a market value of €14 billion by 2028, resulting in annual losses of €4 billion for creators.

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Generative AI is reshaping the music industry, but at what cost?

A recent report from the International Confederation of Societies of Authors and Composers (CISAC) projects that by 2028, music creators could lose up to €4 billion annually due to the growth of AI-generated music. This represents nearly 24% of creators’ revenues. At the same, the market for AI-generated music is anticipated to surge to €16 billion a year, with an additional €4 billion generated through fees and subscriptions to their generative platforms.

The CISAC report used “qualitative and quantitative methodology,” incorporating interviews and workshops with over 50 industry professionals. Notably, the report focuses on the impact of Generative AI (GenAI) on creators’ earnings, which are the revenues collected by songwriter societies. Not including the money earned by recording artists, which would add to the far-reaching implications for the music industry.

The financial impact

The report delves into the economic weight and impact of GenAI on songwriters’ earnings, revealing startling statistics about its projected influence on the music landscape:

  • GenAI music could account for 20% of revenues on traditional streaming platforms.
  • AI-generated content might dominate 60% of music libraries’ revenues.
  • The audiovisual sector, including social media and TV, could shrink by 20%, as the GenAI market grows to €64 billion by 2028.
  • Over the next five years, the cumulative loss to music creators’ revenues could reach €10 billion, while generating €40 billion for GenAI companies.

GenAI music is projected to play a significant role in areas such as mood music, and passive playlisting on streaming platforms. Other projected common uses of GenAI in the music industry include:

  • Curation and consumption by users on streaming platforms.
  • Commercial distribution on music streaming platforms.
  • Background music in audiovisual works, public places, and library music for games and other media.
  • Music for core content in audiovisual works such as films and TV shows.

Rights and revenue: the underlying problem

At the heart of the issue lies the training of GenAI systems. These models are often trained using copyrighted music, sparking debates over intellectual property rights. While the music industry argues that permission is required to use copyrighted works, many AI companies disagree, currently operating in a legally grey area.

The unlicensed use of copyrighted musical works by AI companies represents a significant challenge, with the report warning that the billions gained by AI companies reflects a “transfer of economic value from creators to AI companies.”

“AI companies stand to gain €4 billion from the unlicensed reproduction of creators’ works. Transparency, fair pay and control are non-negotiable.”

Robert Nori, CEO of The Ivors Academy, the organisation representing UK songwriters

The music industry is calling for lawmakers to clarify copyright obligations, with this report likely being used to urge governments and legislators that urgent action is needed. Without intervention, creators risk losing control over their intellectual property and receiving no compensation for their work being used within AI systems.

“Without the works created by humans, there are no AI works. AI needs to be fed with… content that is created by humans, in order to be able to produce machine-made work.”

Gadi Oron, CISAC Director General

Björn Ulvaeus, CISAC’s President and former ABBA member, draws a comparison between AI training and human inspiration: while humans pay for music consumption through recordings or radio royalties, AI systems use these works without compensating the original creators.

Potential solutions

The study concluded that under regulatory frameworks in most countries, creators stand to lose on two fronts:

  1. Unauthorised use of their works by generative AI models will eat into remuneration earned through copyright.
  2. Work opportunities will shrink as GenAI outputs become more competitive against human-made works.

By requiring AI companies to obtain permission to use creators’ music for training, creators could receive a fee or demand a share of the revenue generated by AI outputs. Therefore, the revenue losses for creators could be mitigated.

Efforts are already underway to clarify regulations in some regions. Australia and New Zealand have been praised for leading the way in developing policies that protect creators.

Ulvaeus believes that the resolution needs to help develop AI whilst protecting creators’ rights and their creativity, citing a solution could be where all AI companies license music and pay a share to creators. Perhaps, initiatives like the planned 2025 project by Musical AI and Beatoven.ai which aim to incorporate revenue-sharing models into GenAI music, could offer a blueprint for the future.

Ethical AI music generation: are Musical AI and Beatoven.ai shaping the future of copyright and creativity?

Urgent action is needed

Whilst recognising the positive impact of AI to enhance creative processes, the report underscores the necessity of swift legislative action. AI development should never be at the “expense of creators’ rights” and fair remuneration is needed.

Without any changes, the music industry risks losing billions, while creators’ rights and livelihoods are further undermined. AI isn’t going anywhere, but we need to make sure that its progress enhances, rather than exploits, human creativity.