MT Stars on Music, AI, & Gaming: Music Reports, TuneCore & Reactional Music
Catch up with leaders in music and innovation who are deeply involved with the Music Tectonics Conference this October as Dmitri and Tristra sit down with three fantastic guests.
Check in on what’s bubbling up in every part of the music landscape and get a taste of the in-depth conversations we’ll be having at the conference.
First up, Tristra sits down with Bill Colitre at Music Reports on the state of music licensing now that the AI cat is out of the generative bag, and how Music Reports is responding.
Then, Dmitri chats with Andreea Gleeson of TuneCore to talk about how they are simultaneously continuing to support independent artist careers while leaning into how AI can extend artist revenue, such as with their work with Grimes’ AI project.
Finally, Tristra returns with a conversation with David Knox of Reactional Music to get a perspective on how innovations in music are converging with the rise of gaming culture to lead to deeper collaborations and more immersive experiences.
Preview the excitement of the Music Tectonics Conference in this week’s episode!
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0:00:11 - Dmitri
Welcome back to Music Tectonics, where we go beneath the surface of music and tech. I'm your host, Dmitri Vietze. I'm also the founder and CEO of Rock Paper Scissors, a PR firm that specializes in music tech and innovation. In the lead up to this year's Music Tectonics conference in October, irregular host Tristra Newyear Yeager and I have been catching up with the leaders in music and innovation that are most deeply involved with the conference. These chats are a great chance to check in on what's bubbling up in every part of the music landscape and get a taste of the in-depth conversations we'll be having at the conference this week.
We have three fantastic guests for you to meet. You'll see some themes emerging. I swear we don't pick these themes for the conference or for the podcast, but everyone's talking about them. First up, Tristra sat down with Bill Colitre at Music Reports on the state of music licensing now that the AI cat is out of the generative bag and how Music Reports is responding.
Then you'll hear my chat with Andreea Gleeson of TuneCore to talk about how they're simultaneously continuing to support independent artist careers while leaning into how AI can extend artist revenue, such as with their work with Grimes AI project.
Last but not least. Tristra returns with a conversation with David Knox of Reactual Music to get a perspective on how innovations in music are converging with the rise of gaming culture and a future where artists and game developers co-create immersive experiences. This episode is going to be a wild ride through music innovation, so hold on. First up is Tristra and Bill Colitre, vice president and general counsel at Music Reports, a leading independent provider of music rights, data administration and management services in the world. Take it away, Tristra.
Bill Colitre on the State of Music Licensing in a Global Industry and the Promise of AI
0:01:51 - Tristra
Hey. So it's great to have you. Bill. Thanks so much for joining us. I'm very eager to hear your perspective on some of the topics that I know are going to be of burning interest to other attendees of Music Tectonics in October. So I hate to start off this way, because I know this is one of those topics that kind of makes the room go silent and the needle scratch on the record. But let's talk about licensing. So you have a really great, both very in-the-weeds as well as a bird's-eye view of how licensing is unfolding right now. How are things changing? What are you seeing from your perspective?
0:02:32 - Bill Colitre
Well, one of the things that people often say about music licensing is that it's broken, in large part because there's no complete database of who owns all the music, and so licensees feel like they're lost and at the mercy of the rights owners when they want to try and create a new type of service for consumers. But that's really not as true as it once was. There are large quantities of publishing data that are available today that can be applied to licensing challenges.
And, by the way, not every music licensing strategy requires that you have every single recording in existence.
0:03:11 - Tristra
Those are two reasons to rejoice right there.
0:03:17 - Bill Colitre
Yeah, I mean, I really think there's more positive news than people give credit, right. Today's services can strategically license just the rights that they can afford if they're like a small startup, and, just as importantly, any service can know with absolute certainty today, on a day to day basis, which recordings they can use without a risk of infringement. And that's only been possible in recent years, which is why most people aren't aware of it. It allows much more efficient go to market strategies.
0:03:44 - Tristra
That's really cool. What are some other good news that you've heard? Tell us the good news, Bill.
0:03:51 - Bill Colitre
The fact that these things are becoming more nuanced and more surgical means that we're creating a much more competitive landscape for publishing rights and that creates opportunities for the prepared. You know, it's actually really great for professional songwriters and music publishers because it creates a market for professional music where they don't have to compete with 120,000 new sound recordings flooding the market every day and even more coming soon from artificial intelligence, right.
0:04:23 - Tristra
So OK, that's really amazing to hear and I'm wondering, as you've been working with Music Reports customers what are some new aspects of licensing deals that are writ large in general that you've seen unfolding recently, and you mentioned all these great new developments, but what else is going on that you think is really noteworthy and you want to share with the industry?
0:04:47 - Bill Colitre
Yeah, I mean I suppose I should probably unpack a little bit of what I just said. I mean, when you actually have a registry of who owns all the shares of all the music and every rights type in every territory, you can pre-match the sound recordings that a service wants to use to the music publishing ownership structure of those songs before they do anything.
And really that's the revolutionary thing that I don't think most people are aware is commercially available in the market. So when services come to us, we can just immediately tell them what they can use based on the licenses they have and then help them get new licenses. So you know, many people are familiar that the MLC created a blanket licensing arrangement, right, and created a public database that solves a lot of this challenge. But that only works in the US, it only works for mechanical rights, and it only works if you're eligible for that blanket license.
It's actually pretty narrowly tailored for full catalogs, training, music services, and it's also really expensive because you have to pay to support the MLC which has a really enormous budget.
So there are lots of services that aren't eligible for that kind of thing, like fitness services or VR or spatial computing services, gaming, music, instruction, anything with video, right?
None of those things are eligible for the Section 115 blanket license. So they come to us. We match the recordings that they've licensed from the sound recording owners to the publishing ownership rights and then we tell them OK, well, since you have a deal with Sony Records and Warner/Chappell Publishing, this is the Venn diagram of recordings that are cleared for both sound recording rights and publishing rights, and we give them a license status update every night overnight, so every morning they can add new songs to their service as they bring in additional publishing or label licenses. So the question of infringement becomes much more bright line than it used to, right? I think a lot of rights owners used to just assume that digital services go out and use whatever without respecting anybody's rights and throw caution to the wind and try to build the service and then license it after the fact, but that's a super risky strategy and it's one of the reasons that investors don't like music startups.
And we don't have to do it that way anymore. Now we can just tell you with specificity every night, these are the songs that are clear to use. Don't use these ones.
0:07:14 - Tristra
That's really amazing. You know, I have to admit to the listeners, Bill and I had a chance to chat a little bit before we started talking more formally on this recorded portion of the interview. And, Bill, I picked your brain a little bit about AI. With your background in copyright and intellectual property as a lawyer, I wanted to hear a little bit about your perspective. I'd love for you to share some of that with our listeners today. What aspects of this conversation are you really looking at with a particular ear, as someone who is working so closely in licensing, what are some aspects you really want to highlight that you think people should be talking about more when it comes to things like rights ownership and the burgeoning world of music and generative AI?
0:08:09 - Bill Colitre
AI is so amazing, right? I mean, it's a sea change for the whole planet and it's super exciting for me. I have had a theory for a number of years that everyone, eventually, is going to have their own subscription AI systems, who is going to be a privacy-oriented avatar for their own stuff, as opposed to just using Siri or Alexa, which are not sort of private to you. So I think that the changes that we're going to see are going to be enormous and we're just beginning.
But in terms of generative. AI and music, there's two things that I've been really interested in. One is obviously just going back to what we were talking about before. The volume of new releases every day is like 120,000 new recordings, right. That's just an insane quantity of music to have to compete with if you're a professional musician. And so what happens when you can create a song from a prompt? You know we're going to see 10x that number of sound recordings coming into the system all the time, right, and it's going to be all the more important to distinguish your music from that sea of competing music.
And so you're going to want to make sure you focus on premium music services, where that long tail doesn't wash out your opportunities. And you're going to want to register your works. I mean, like I've been saying this for maybe 10 years right, if you were a painter, you would never release a painting without signing it, right? So why do songwriters release recordings of their songs all the time without registering them? It's mystifying to me. I mean, I know the Copyright Office is expensive and slow. They've gotten better about that but it isn't actually necessary to register with the Copyright Office anyway. What you really need to do is register with your publisher or your PRO, and certainly with Music Reports, because we're paying royalties on behalf of so many services at this point. It's dead simple to do that. We need a bunch of tools available to people for that purpose.
So, register your works so that you can be heard among the flood of music that's coming.
0:10:23 - Tristra
This points back to sort of an eternal problem in technology, and in music technology specifically, we always come back to the people. So you talk about smart contracts and we're going to have these great technological platforms that are going to help us manage splits and all these things, but at the heart, you have a person who needs to do something or maybe agree with other people, which is even harder to have happen. So I love that you're pointing out the human point of frailty in the overall licensing scheme, which is getting more and more technologically robust and better serving the digital music world.
0:11:09 - Bill Colitre
The fact is we don't have a technology problem when it comes to registering music. That's dead simple. It's an education problem. Sometimes it's a political problem, it's a human nature problem, but it's not a technological challenge.
But there's a different aspect of that I think that's super interesting from AI as well, which I don't think very many people are focused on right now, which is there's three large groups of intangible property that underlie entertainment generally, and they are copyright, of course, but also trademark, but also name and likeness rights. But name and likeness rights have generally been sort of an afterthought to the markets for copyrightable media content, and so they've usually been thrown into contracts as something that follows along for the marketing promotion of the media thing that's really being marketed as part of a marketplace of copyright sales. But now we have this world in which your name and likeness can live outside of any particular copyrightable media. Currently, the rules are that you can't register a work that was created with generative AI if it was more than 50% created by the technology as opposed to the human using a technology, roughly speaking.
So, if there's this huge, mass of unregisterable, non-copyrightable works that are floating around but they contain your name and likeness, then you can use the name and likeness right as an economic basis for creating a market for those things that wouldn't otherwise be monetizable. And so the perfect example of this is what Grimes has been doing with her Elf.tech company.
It's a super interesting experiment that she did, where she's creating a marketplace for her name and likeness to go out and be used by many people making recordings that she has nothing to do with, songs that she has nothing to do with, but through the way she's set up her thing, able to own and monetize some of the resulting works that come back, and I think there's going to be lots of other kinds of experiments that can be done along those lines, and I also think that creating registries of who owns and controls those name, image, and likeness rights in order to make it easy for entrepreneurs and creators to find and exploit those things to the benefit of everybody is going to be really interesting opportunity.
0:13:43 - Tristra
Amazing. So another aspect of the whole licensing world and of rights administration, royalty administration is the fact that we live—this is not going to be news to anyone— in a global industry now. In the past, it's been very challenging to work with the huge number of global CMOs, all the different regulations and every single jurisdiction, et cetera, et cetera, to sort of create an efficient worldwide licensing infrastructure. But I know that a lot of progress has been made in that area as well. So I was wondering if you would be willing to talk a little bit about what's changed in terms of licensing on a global scale and what you would love to see change further.
0:14:32 - Bill Colitre
Obviously, the legacy international music rights system is based on discrete territorial copyright rules, and so you've got this balkanized global landscape that, in prior years, where the business was physical, meant that there would be an industry for German recordings and an industry for Belgian recordings, and they didn't necessarily have much overlap and there were companies and distribution networks set up in each territory to monetize those markets. But as soon as everything goes digital, digital wants to be global. If you're a service that has the ability to reach customers digitally without having a local physical plant and distribution system in the territory, then you have this natural opportunity to grow your margins by reaching as many customers as you can everywhere in the world.
And there's really no barriers for that to happen. So if digital wants to be global, it needs solutions that are based on a more efficient global system and the legacy structures for music rights administration are all based around these territorial blocks.
So what's happening is that's all really heating up. We're seeing competition among global rights administrators and all kinds of just wild things starting to happen. For example, just in the news this week, BMI has decided to go for-profit. But also buried down in those press releases there's a mention that they're looking at going global as well. What does it mean when BMI becomes a direct global licensor of Anglo-American performing rights? GEMA has been touting its technology acquisitions internationally because maybe they intend to go international as well.
SACEM already claims to have the largest international footprint of any CMO, and PRS has had branches in the United States for years and has just announced a Pan-African strategy. So we're seeing lots of interesting changes to the way this works and territorial groupings. A great example of that is Latin America, where, when digital emerged, the Latin American markets realized that it was going to be complicated and slow down the development of digital in their marketplace if they didn't create a regional solution. So they created this two-sided system where the mechanicals are all run through a scheme called the unique window and the performance rights are all run through a scheme called Latin Outor, but you basically get two licenses and now you've got 15 Latin American countries and it's the easiest thing in the world. So now you see how fast the Latin American market is growing. As a result of that, it's truly powerful for rights owners and great for consumers and services as well.
So I think we're going to see a lot more of that kind of thing.
0:17:31 - Tristra
Yeah, that's really fascinating and, to my knowledge, isn't talked about frequently in general music tech circles. I think that's really really cool. So do you see a future where there are more and more I mean it's almost like an economic union, like the EU or something. Do you foresee more sort of regional licensing unions or coalitions or groups like that coming together?
0:17:59 - Bill Colitre
Yeah, that's definitely happening, but it's not nearly that easy. This is music business, right, exactly. So what's happening at the same time is that a lot of the services are just skipping that whole system altogether and doing direct deals with the rights owners. So why even involve a collective between the source of revenue and the distribution of that revenue If you can just directly license the reproduction and performance rights you need in every territory the world directly from the music publisher who controls those rights? And so the trick there is. Of course, everything's more complicated than it seems.
In Anglo-American territories the publisher generally has the right to do that, to grant both the mechanical and the performance independently, whereas in other territories and by Anglo-American I mean any English speaking, really it's UK, Ireland, Australia, New Zealand, the United States, of course, Canada, and what can happen in those jurisdictions is the publisher can just license, for instance, the big global digital music service directly and get paid 45 days after the close of the quarter, super efficiently, rather than going through a collective management system or a what's called a hub in some of these joint ventures between publishers and CMOs, where the claims that come back take years to settle and the money is very slow and there's a lot of technology friction in between.
So the reason you would stick with the old school system is that in other jurisdictions outside of the Anglo-American territories I mentioned, the songwriter often assigns to their performing rights organization the right to the public performance aspect of their music, and it's a complete assignment. They don't retain any independent right to do it, even a non-exclusive direct grant of rights. So if you're one of those writers or publishers attached to one of those CMOs, the CMO has absolutely control over your performance rights and even the publisher can't do a deal with the digital music service without the permission of the PRO. This is what creates these panterritorial licensing schemes like Solar for Sony, heddle for Warner/Chappell, eresa for BMG, and you have these schemes that work through a claims-based administration system. That is just much more inefficient than a direct affirmative administration system.
0:20:39 - Tristra
Amazing. So what I just to summarize things are definitely taking big steps forward in terms of improving efficiency, making the industry more global from a licensing perspective, but there's a long way to go.
0:20:54 - Bill Colitre
Well, we're already there now. It's really the reality, but I think it's a long way to go for people to sort of catch on to the stuff that's already happening. But there are major digital music services that are already directly licensing and paying publishers in every territory of the world today, and those publishers are all having the benefit of much lower administration costs and faster collection of their royalties. And there's already ways of administering a combination of direct affirmative accounting where you can get it and claims-based accounting where you can't, in a single harmonized system. So services can already go to market for these strategies now. There's just a lot more good news than bad at this point.
0:21:39 - Tristra
That's great. I'm glad to hear that. That's an exciting moment in today's world when you can hear that there's a lot more good news than bad. Usually people don't associate licensing with good news, so I'm really glad you set us straight on that.
0:21:53 - Bill Colitre
I'm glad I could help out.
0:21:55 - Tristra
Well, I'm also looking forward to seeing you at Music Tectonics, Bill. Before we go, is there any other topic outside of the area that you're an expert in that you're particularly excited to learn more about?
0:22:07 - Bill Colitre
Yeah, well as I mentioned AI is definitely the hot thing right now, and I think there's just so many opportunities that we don't even recognize at this point. You know, when mobile computing came along, everyone saw that that was amazing, but really no one understood how fundamentally that was going to change so many aspects of our lives. Just something as simple as Uber was inconceivable before there were smartphones, right. But that has completely changed the landscape, and just to tout the conference. La is my hometown. It's my favorite city in the world. I can't wait to see you guys all in October. But the city of Los Angeles was much harder to get around before Uber existed.
0:22:48 - Tristra
So I guess that's another piece of good news. You can get around. It's finally easier to get around LA. Well, thank you so much, Bill, of course.
0:22:59 - Bill Colitre
I'd love to do this again sometime, absolutely.
0:23:03 - Dmitri
That was awesome, Tristra. After the break I'll be back with Andreea Gleeson of TuneCore to talk about their research on how artists are seeing the use of AI.
0:23:12 - Shayli
Hey, Shayli here with the Music Tectonics conference update. We're holding a flash sale on conference tickets right now. If you buy yours before noon on September 8th, you can get $50 off your ticket. That ticket gets you into the online pre-conference on September 13th with a keynote by Mark Mulligan of Midia Research, and to our in-person conference October 24th through 26th by the beach in Santa Monica, California. Ready to save $50? Go to our website at MusicTectonics.com. Enter the code MTFLASH2023 to reveal a secret discount ticket. Get yours before the flash sale ends September 8th.
Andreea Gleeson on the Indie Sector, Creating GrimesAI, and Building Greater Equity
0:23:56 - Dmitri
Today, I'll be joined by one of our esteemed Music Tectonics conference speakers, Andreea Gleeson, the CEO of TuneCore. Andreea joined the company in 2015 as a member of the senior leadership team, first as chief marketing officer and later promoted to chief revenue officer. She's helped build TuneCore into one of the most dynamic and innovative companies in the independent music space. Under her guidance, tunecore has pushed the envelope and innovated, bridging together product and technology with marketing and community to create a best in class service for independent artists, both for today and tomorrow. Andreea has built successful partnerships with YouTube, facebook and Spotify. In early 2021, she launched TuneCore Rewards and TuneCore Certified, two artist education and recognition programs which aim to level the playing field for independent artists.
Andreea is also a fierce advocate for female identifying creators, commissioning the media research study Be the Change Women in Music 2022, to identify why independent female creators remain underrepresented in the music industry and raising awareness on their challenges. Today, we bring her on to Music Tectonics to discuss the growth of the independent artists sector and innovations taking place for them in the industry. In particular, tunecore has dived headfirst into the AI and music conversations, first with a bold partnership with Grimes and, more recently, a steady surrounding artists use and sentiment around AI and music. Andreea, welcome to Music Tectonics.
0:25:23 - Andreea Gleeson
Hello, thank you so much for having me. I'm so excited to be on.
0:25:28 - Dmitri
Yeah, and I'm excited to have you at the Music Tectonics conference. So this is part of us highlighting some of our speakers and active participants there. First of all, how did TuneCore get so engaged with AI?
0:25:40 - Andreea Gleeson
So, like everyone else in the industry, we've been watching AI kind of skyrocket over the last like nine months. We'll call it. I mean it's been around. I think AI just has been kind of renamed because before that it was programmatic, then it was machine learning and now it's AI, but it's really really exploded because the use of it to be kind of an assistant to you really really grew with the big adoption of chat, gpt and I think when it crossed over into music specifically, if we can go back to the spring, is when there was that situation with the release that went out using Drake and the Weeknd's voice, and the music industry kind of melted. So we were watching this all very closely and I think what I think it showed here is the problems that can be created in that kind of scenario. And it is problematic because a few things were not there. One, there was no consent from Drake and the Weeknd to say, hey, yes, you can use my voice in this way. There was no control. Essentially, just the music was going out without their input and they were not being compensated for that. So of course there were going to be problems and then fast forward to just a couple of weeks, maybe a month later, grimes comes out and she says hey, actually you can use my voice. I've been training AI on my voice with music that I 100% own, and if you use my voice, you keep ownership of that creative that you've created. However, you just need to treat me like a collaborator and pay me 50% on that track. So, as all of this was breaking, I just happened to be at IMS in Ibiza and Daouda [Leonard], who runs CreateSafe that actually built this model for Grimes to actually train her voice on the AI, was there, and so was Grimes, and so we began immediately talking about the vision they had around this, but they didn't have the operational setup to be able to do it at scale, and so we just immediately started partnering up because we shared the same vision.
At TuneCore, our mission is that we ultimately want our artists to be successful. Our goal is, you know, we want our artists to grow, and that's how we prioritize. Everything we work on is related to how do we help our artists grow and how do we do that is a couple of ways An artist is going to grow if one they have good music, and then because you can only put so much lipstick on the pig and then to you you need to get that artist music to listeners that have been affinity for that music. What we saw with what Grimes was setting up with this is it squarely felt into how can we help our artists make better music. They can be able to collaborate, maybe with somebody that like Grimes to have her voice on their track in a way they would have never been able to collaborate with her before. And we saw an opportunity with that. And what was so great is that the way that she was setting it up was aligned with the principles that we have related to anything we're doing with AI, which is around.
There has to be consent.
How we set up the partnership is?
We said, okay, grimes has agreed, she's trained and AI on her voice and she's allowing artists to use her voice in their music to.
There is control, because how we set up the process with her is that she is. She and her team are reviewing all the content for editorial review and then we also do another layer of review to make sure that it's meeting all the DSP requirements. And you know, is music that is in line with all of the specs for the DSPs. There is compensation. She is at scale we're making, requiring that anything that gets released has a 50% split going to Grimes, so she is monetizing on all of these, these tracks that are going out. And then there's transparency through the whole process, because when the song is released, it's actually released under a new artist name called Grimes AI, and so everybody knows exactly, you know how, you know who, who is the collaborator, and so with this really fell very much in line with the way we're approaching all projects with AI, and this was, even though it's very early and we're still kind of building it out and building more skill around it. It created an opportunity for us to dabble into a program and, you know, a partnership for AI to help our artists be able to engage with AI in a framework that is responsible.
0:30:29 - Dmitri
Right, wow, that's. That's really interesting. I mean, when I think about you guys as a distributor and think about the idea that you know distributors get music into different places where people can buy or experience music for compensation, and thinking about this is like almost like a new outlet, you know, like this is like a new, a new way for people to experience music that's artist friendly and also a whole different level of engagement, which is super interesting. How did the rollout go with Grimes AI? Has it been successful?
0:31:03 - Andreea Gleeson
It really has. You know, I think that what we're really excited about is one just the reception on it from both the music community and then our artists has been very positive, because we created it around a framework that was very responsible, around consent, control, compensation and transparency. And, you know, right now we have artists that are able to collaborate with Grimes, even though they're not actually meeting with her, and being able to put her into their music. And I think I got very excited when you know people that historically you know, like Cherie Hu who is from Water Music, a journalist, has never recorded music before was able to start to create music. She partnered up with a producer and they put out a song called egg roll using Grimes AI voice as a collaborator, which is just amazing.
What I love is that we are creating opportunity for individuals who maybe would have not, put you know, created music before, and now they have a way to do that with a way that is high quality, and for us to be able to put out music that is helping artists put out better music, too, is very exciting, and it's literally ground zero.
We have so much more to build from here right now. What I'm talking about with data from create safe is like how do we get more artists voices in addition to Grimes and there is more tooling that they're building around, adding even more for artists to be able to do in create safe in addition to this voice transformation. So this is just ground zero. We wanted to not have it be perfect and fully you know, fully like set up for scale, because right now there is a human review for all this editorial review on the control side of it. But this is where you can't be afraid to put out an MVP and this is very much like a pilot MVP that has proved that there is a responsible framework that we can help our artists be able to engage with AI, you know, responsibly.
0:33:09 - Dmitri
Nice, well, let's skip back to this study that you guys released very recently. You surveyed over 1500 independent artists last month. Why did you conduct that survey and what were the most interesting things you found out?
0:33:21 - Andreea Gleeson
Yeah, so everything that we build at tune core has to rely on what artists you know, what is in line with what our artists want and need. So, understanding. We survey our users all the time on everything we do and it's really tricky because you don't want to just, you know, ask them what you want, because we want to build things that can't even imagine. But understanding sentiment and needs really informs them how you innovate. And this, obviously, as we're starting to build out new AI programs. It was really important to go to the artist first, and we had over 1500 respondents that were. You know. Many of them had over 10 years of experience in the music industry, so they're not all just brand new artists and they came from many parts of the world. And I think what I got most excited about with the learnings from the study is that, for it being such an early phase of adoption and AI, like I said, everything that we're doing with the Grimes partnership Is literally like a pilot right, but it's so early yet the positive sentiment on on already artists that are using AI. So 50% said that they were aware and engaging with AI and then 27% said that they are already using AI, mostly on the creative side. So they're using it to create their artwork, they're creating promo assets that they're engaging with their fans. So that's predominantly how they're using it today. But we also asked them how are they interested in using it? And the tooling right now is still very new about how you engage with AI. It's still ramping up, but, you know, 35% said that they would use the AI in in their creative process, so like to use generative AI. And then the other big bucket was around their marketing and promotional tools, because that's very right now. So many artists have to wear so many hats. You know they're a musician, they are their own producer, they're their own, like you know, booking agent. They're also doing all of their social media and marketing. So I think that it's very exciting to see how can these tools help artists to simplify some of those hats that that they have to wear, to give them a little bit of a jumpstart. And so knowing the things that they are interested in using AI for informs where maybe we focus on, because we see opportunities in several sectors, but this is it shows greatest need to then inform our innovation. And then, lastly, I think for us we're going back to the responsibility side of it that you know, when we're setting AI partnerships, we need to make sure we're doing it responsibly.
We also wanted to really understand okay, well, you know there's been a lot of talks about engaging with, opting in your music for machine learning.
One thing that was really interesting is 50% of the respondents said that they were willing to offer their music for machine learning, but they needed to make sure that it was done so responsibly. And that comes down to when you look at like the things that they were concerned with. One was permission, so consent, going back to those principles that I mentioned compensation they want to be compensated for putting their music into machine learning and they want to get credit. So, and that's the transparency piece. So I think that what what it's really helped us do is that it really helps us understand for next steps, as we're partnering with our DSP partners further. I mean, we've all seen them in the news met as announced that they're building out AI, so is YouTube, etc. So how are we then making sure that we're also building out those programs really responsibly to meet the needs of the artists but also create opportunities, because there's a lot of opportunity ahead to.
0:37:13 - Dmitri
Yeah, great, awesome. And if folks want to check out the report, it's at tunecore.com/AI. It's got a beautiful display of some of the data there and folks can get the report directly there. Hey, luckily we're going to have you speaking at the music tectonics conference in Santa Monica this October. Obviously, lots we can talk about. Super great to hear your enthusiasm for the industry and for innovation, but we will get a chance to widen out more while you're in person. But before I let you go today, what is the state of independent music this second half of 2023. Is it getting over saturated? Is it growing? What's the future of independence in music? Look like.
0:37:52 - Andreea Gleeson
Yeah. So before I say where it's going with, look at where it's come, especially for self releasing artists my segment and what I get very excited about is that the momentum for growth for self releasing artists is continuing. Media does a study every year and what they shared for 2022 was that independent labels and artists direct strongly out performed the wider streaming, and so labels grew 13.9%, artists direct my segment grew 17.9% year over year and DIY artists now represent 5.7% of the global music market share. This was like 1.7% when I joined the company in 2015. So the fact that it's grown this much it over the last seven and a half years is absolutely incredible and it's continuing to build momentum. And so and why is this happening? It's because, ultimately, artists don't need a traditional label to actually find their fans, with the rise of streaming, which has actually made listenership more accessible to more listeners around the world and we're seeing a really big growth of international audiences be able to access music to listen to, and because it's more affordable. That, coupled with fans being able to find artists more directly on platforms like TikTok Reels, youtube Shorts and that inflection point, has allowed the artist direct segment to actually build their audiences. And that's gonna continue and I think what I'm very excited about with some of this technology that's coming out, like we just talked about some of the early iterations of AI. But AI, I think what makes it so exciting is it can raise the skill set of somebody to a higher level to actually create more availability for artists, to raise the quality of the music they're creating. And also the DSPs are building programs left and right where they're better aligning listeners with music that have affinity for certain music, and those two things are going to do the things that I talked about at the beginning.
That is our priority is like how do we help our artists make better music? And then how do we help them become better known? And so, while, yes, there is a lot of content that is making it into these platforms, getting the right content to the right users is getting better, and it's much like think about Amazon, right? So I came from retail before I came to TuneCore and Music and a lot of what we're seeing happening in music right now already happened in retail. If you go to Amazon and look for a black turtleneck, guess what? You're gonna get a C of black turtlenecks, but Amazon has known your shopping behavior and it's gonna prioritize certain brands, certain fits, certain things that may suit you better because of your prior shopping and make that easier for you to find the things that you like. Same thing is happening with music, and so I think that tools to actually help artists make better music is getting better and better, and then that matchup is getting better on the DSP side and those things will be to the benefit of the listeners and the artists and there's just more niche audiences that can build fandom around artists around the world to make more artists be able to have a sustainable career off their music. And that's gonna be what's been happening, what's gonna continue the rest of this year and as we look ahead into the years to come.
0:41:21 - Dmitri
I love it because you're talking about different tools that are creating more access for creative people to make music and, as a result, they'll probably make more diverse and different types of music. And then we have to have a way to find the right audiences. So the way you're talking about that matching up with fans, it just serves more of an independent community. We're seeing, I think, more diversity in what kind of sounds are being created, and then now we just have to match up the audiences a little better too. Exactly Now, everybody wants to listen to the same thing. Anymore. It's not a handful of radio stations broadcasting strongly formatted sounds to a wide audience. Now it's really about finding your audience, which is great to hear about as well.
0:42:00 - Andreea Gleeson
There's infinite aisles, there's no longer a shelf space, that's right, there's no longer, which is beautiful and challenging in the sense exactly, we have to actually do that matching, that's matchmaking better. But I think you can see it already that that technology is developing and becoming better and better and that's what's really exciting ahead.
0:42:18 - Dmitri
And this is the kind of stuff we love talking about at the Music Tectonics Conference. Andreea, this has been absolute pleasure hearing a little bit from you and getting a taste of what we might talk about at the conference, and it's really exciting that we're gonna get to hear you in person in LA. Thanks for joining me on Music Tectonics.
0:42:33 - Andreea Gleeson
Thank you so much for having me and to see you in LA.
0:42:36 - Dmitri
That was a blast. I'm looking forward to Andreea's presentation at Tectonics. We're gonna take a short break, but stick around to hear about the convergence of gaming and music with David Knox of Reactional Music.
Are you ready for Music Tectonics Pre-Conference Event the shock before the quake. It's happening online September 13th from 10 am to 12 30 pm Pacific time that's one to three 30 pm Eastern, or six to eight 30 pm UK.
Mark Mulligan of MIDiA Research will kick us off talking about the deep trends shaping music and innovation. If you've ever seen him present, you know Mark will bring an incredible slideshow full of data and insights powered by Midia's research. Then get a first look at where the most cutting edge new ideas are bubbling up. Here are pitches from the semi-finalists in our Swimming with Narwhal startup competition and feedback from the jury of investors Aadit Parikh of Sony Ventures, Juliette Rolnick of BDMI and Tracy Maddux of Downtown Music. They'll stick around for a Q&A with you, the audience. How can you be a part of this event? Get a ticket for the Music Tectonics Conference at MusicTectonics.com. Everyone who registers for the conference gets into the online pre-conference. See you there.
We're back and I'm gonna hand it over to Tristra for a conversation with David Knox, president and co-founder of Reactional Music. David is the perfect person to talk about the convergence of music and gaming. He spent over 26 years as a senior executive at EA, that's Electronic Arts, as they transformed from a small startup to a major player. Now he's heading up Reactional Music, which he founded to change the way we experience, interact with and enjoy music and games. I can't wait to hear more. Over to you, Tristra.
David Knox on how the Convergence of Music and Gaming can Fostering Collaboration and Creativity
0:44:16 - Tristra
Hey, David, thanks so much for joining us.
0:44:18 - David Knox
It's an absolute pleasure, Tristra, thank you.
0:44:21 - Tristra
So I wanted to talk to you a bit about your view of gaming and music, which is a very, very hot topic right now, at least from the perspective of the music industry, who has a lot. I mean, we've set a lot of our hopes on games as a potential new way to reach audiences, in particular, younger audiences, and to reach them in new ways. You have a really in-depth view of what exactly is going on between the gaming industry and the music industry, so I'm really excited to speak to you today about that. So, first up, I wanted to hear your perspective on how gaming companies and developers have changed their idea of music's role in gameplay. How are people understanding what music could be as they're thinking about building games?
0:45:09 - David Knox
I think it's interesting. Having myself spent most of my working life in video games and then the last sort of two to three years in the music industry, I've gained a much wider understanding of two creative industries trying to work together where there is really a very obvious fit. I think on the gaming side there always was an understanding how music and sound is important to the gameplay. They build everything around gameplay itself, but then the use of music and sound is, you know, what's going to appeal and give the gamer a better gaming experience. So I think the things their view of music is, from one end, the view of how important it is to the gamer experience and, on the other end, also recognizing from a gamer side, having music that they recognize and having music that resonates with them, has a place within gaming. And I think part of what I've experienced over the last couple of years is some of the challenges on the music side in how their existing models and their existing experience with gaming and the way it operates sort of create some friction between the two. I think it's something that both sides are trying to understand how they can resolve.
0:46:37 - Tristra
When is music coming into game development? I mean, I think music companies and a lot of us in the music business tend to think of games as a kind of a weird kind of sink right, and usually music comes into the finite, like if you're talking about a show or a film, music's one of the last layers to be added and sometimes it's in post-production right, it's after everything is all put together. And I'm curious if you could explain from what you know about when exactly music is coming into the pictures, so to speak, with games today.
0:47:14 - David Knox
Yeah, it's interesting. Music is a little bit like the Forgotten Child. So when you talk about what happens with movies and with TV shows, it's quite similar, but part of that is technology-led At the moment. When you look at gaming, if you look at physics, graphics, lighting, they all rule-based engines. So right from the very beginning of development there's a lot of flexibility for the developer in what they can do and what they can tie within the gameplay to those areas.
Music, however, while there's a lot of clever stuff done with layering of loops and bringing in and mixing in, commercial music is still hard-coded.
So because of that, the process is different from the rest of the development process.
So what quite often happens is the audio team or the composer will receive a brief and updates as the game is developed, but really it's quite late in the process where they actually bring in the music and try it out and see how it fits.
And I think one of the things that's changing with technology is with what we're doing and how it's reactional is that, you know, by having a music engine that can generate composable music in real-time, note-by-note in-game, it opens up the workflow in a completely different way so the composer can actually be involved right from prototype and I think, for the first time, what we're getting game developers saying to us music can actually play a much bigger part in game design, because it allows the composer to say here's what I'm thinking. Go into the actual prototype of the gameplay, listen to it, jump back out and, because it's in real-time and not hard-coded, come back in quickly and work with the creative team and the game's designers and the marketing teams and say is that what we're thinking about, is that what we're trying to create? So I think that creates a lot of opportunity, both for gaming and for developers.
0:49:20 - Tristra
That's really exciting. You mentioned composers. I'm wondering what you're hearing in regards to commercial music. There's been little slots where commercial music has jumped into games, almost like a little sideshow, right, whether we're talking about GTA Radio or a quote-unquote performance or concert in a game environment. I'm wondering, though, are there new ways that commercial music could weave into things, or you're starting to see weave into games more? And what's the licensing question? Maybe we'll get to the licensing question in a second.
Let's talk about the fun, creative stuff first.
0:49:58 - David Knox
Absolutely. creatively, there is a major opportunity. It's funny you mentioned some of the examples, such as GTA and, for instance, the Travis Scott, which was the first thing won within Fortnite.
I mean, actually, this year the GTA Radio was 20 years old, yet people still reference it, and I speak to a lot of people within the music industry and and right, so there's, they're referencing it as well.
Here's a way that music can be in there, and Travis Scott is now three years ago.
So I think the difference is when we did some consumer research and one of the things we found out was that the majority of gamers, when they played the game for a while, they'll turn off all the sound and they put on either Apple or Spotify in the background and listen to music they want to listen to because because a lot, a lot of games of music that's looping and is repetitive, Whereas you know what they're looking for is a place in the game, and you know we talked to them in audio interviews about about what they think of the current situation where tracks are brought in, as you say, sort of like sinks, and they either stream over the gameplay or they're used in the parts of the game that are, you know, not interactive, such as the signing up, lobbies and whatever.
So really, the message that was coming to them is, yes, do they want to hear commercial music and music that they love and are listening to when they're gaming in the actual game. But they wanted to have a place in the game, so it actually affects the gameplay in a positive way and gives them a better experience. So, after talking with the music industry, one of the things we understand very clearly was that you shouldn't touch the master. That causes a lot of challenges both creatively with the artist and with the industry generally.
So we developed the technology in such a way that the master doesn't change at all. We attach metadata to the master itself. So when a gamer brings it into the game, everything else within the game the game soundtrack, the stingers, the visuals all immediately adapt instantly to that master track and they're in key in time. So the flexibility of the developer to use commercial tracks within gaming expands dramatically and for a gamer suddenly it actually has place within the game.
I think the other interesting thing, Tristra, that we realised is when you speak with the gaming industry and you speak with the music industry, when a gamer does turn off a game and just listen to music in the background, the music industry doesn't know what they're listening to when they're playing that particular game, and the game publisher doesn't know what they're listening to. So the sort of creation of the data that allows them to say, when someone is playing a particular game, what are they searching for, what are they actually purchasing, and, on the game side as well, for them to understand their core gamers, what music is resonating with them, I think creatively. What that will bring is artists and game developers working much more closely together once that sort of data exists and is made available to both sides.
0:53:30 - Tristra
That's really exciting. In general, it's interesting to think about how an artist could start to influence a game developer or how they could have a really cool collaboration in a way. So many artists are really avid gamers and have taken inspiration from game sounds. There's a lot of different gaming influences on the way people make music today and I'm curious how you see that relationship evolving between game developers and artists or their teams. What kind of are you seeing sort of like the very beginnings of this new kind of creative relationship? I'm just really curious to hear what you've seen so far or what you could imagine happening in the next couple years.
0:54:17 - David Knox
Yeah, we're definitely seeing that.
I think it is really helpful that a lot of artists are avid gamers because they understand themselves what's happening with music and sound within gaming and they can see much more clearly what the opportunities are.
They can see it in the sense that complete tracks they've got. We're also in the sense that we're doing something called music modes, which is sort of a five to twenty second verse that someone that a gamer might say that an end of level boss fight or scoring a touchdown that they would want to attach that piece of music when that happens in the game, and flares that are just little zero to five second bits of a track that might be punctuating different parts of the game. So I think from an artist, especially those who have gamed, the ability for them to look at their existing music or potentially producing music that will punctuate those special moments within the game and add to them you know, whether it's a franchise, they are very close to themselves or, as they say, whether market intelligence shows that gamers playing a certain franchise resonate to that genre or that particular artist or track, I think then the opportunities can sort of explode.
0:55:34 - Tristra
That's really exciting and I mean just to get a little bit sci-fi for a second when I think about the sort of genre list character of very young listeners who are also very avid gamers and I live with a few, so I have a very small sample size, but still they they tend to listen to all sorts of things, from, you know, classic rock to jazz to, I mean to you know, hip hop, trap, rigaton. I think it'll be really exciting to see, to really get some data about what people like to hear and maybe there's those going to be regional variations is going to be all sorts of interesting things that will float up about how exactly people use music in these really immersive environments to like create their own little world right, and how the emotional side of gaming, for example, gets amplified by the music that people choose. It could be it's going to be really, really interesting the next five years or so.
0:56:29 - David Knox
I think that's probably one of the most exciting things. You know, I don't pretend for a moment to understand the creativity that people will have when, for the first time, they can buy music as an in-game purchase. You know, we see them already doing it with lots of everything else within games and they're very used to that economy that exists, but music not having been part of that today, I, you know we'll. I think you're exactly right in the regional mix. You know I saw it within the gaming world. If I think back to some of the franchises I worked on from the very beginning, such as the Sims, where it was very important the cultural relevance of what people had in the game and how that related to their own individual tastes as they built houses and characters and communities.
And I think exactly the same thing will happen when suddenly people can look right across all genres and be able to change their gaming experiences with the music they love. Certainly, we've been approached by a number of labels and publishers that are very specific to parts of the world that you know are exciting because there's a lot of areas that are emerging games markets. So to be able to deliver to those people game or music that resonates with them at the very beginning but, yeah, I think the creativity of the gamers and the artists and the developers it becomes a very, a very exciting space.
0:57:54 - Tristra
That's awesome. All right, I'm going to bring this down a little bit by going back to the mention of in-game purchases, which talks about business, sort of refers to business models, which takes us back because this is the music business to licensing. So you know, at the beginning of our little conversation here we talked a bit about, you know, sync and how the sync model has been used for games, but it's really limiting in that it doesn't let you do all the cool things you're talking about, whether it's emotes or, you know, assigning a cool snippet of a song to your final boss or whatever it is. And so I was wondering if you could speak a bit to what you've you know, just the general explain, a general picture obviously, of what, how people are approaching licenses. Are we looking at a new kind of music rights or are we modifying existing rights in a very crucial way so that all these things can happen and everyone can be happy and get paid?
0:58:52 - David Knox
Yes, as you can imagine, it's been a very interesting journey because what we're doing, either business model wise, with the revenue share, or actually on the right side, doesn't fit into any existing boxes that existed. You know, what we've seen is there is a huge appetite within the music industry to understand what the opportunity could be. And how did they realize that, both creatively and commercially. But, yes, we find out that what? Because what we're doing is not a pure sync and what we're doing is not streaming. It almost sits in the middle. So, yeah, a number of people have said to some various different things as well this, effectively, is a new music right. You know, if we want to be able to do this in games, it's a new music right and I think, from from the start, I think what's been important is to respect what already exists in the music industry today. You know, use a partner as your back end. That is already, you know, working with streaming services and the music industry. Understand respect that we need that you have to have a rights management company and that anything you put on the platform is 100% rights cleared, but also respect that you need a company that understands where all the splits are.
You know it's interesting our founder, jesper Norden, who's a critically acclaimed modern classical composer and a rights holder in his own right. So right from the very beginning he developed the technology to compose and still does today, in fact, most recently working with the San Francisco Orchestra. They're performing his pieces, last in March and October. So he came from a place that everything we do has to respect the creator, the artist, and we have to make sure that people are rewarded properly. So we've approached it in a very open and transparent way. But, yes, it is true that it's challenging when you're a startup and you're picking a journey, even if the end goal is very interesting if it doesn't fit into the existing hierarchy of the music business.
1:01:07 - Tristra
That's such a great point, David. I think it's there. There are a lot of startups with amazing ideas that struggle in that difficult middle zone. You know getting from, you know getting from like sort of I've got stuff going, I'm getting talked to people and then bridging that gap over. All right, here's where we are right now with the industry, but I need it to be five years from now and when folks have seen that the revenues coming in, this makes sense. You know they're getting paid, things are working. I'm wondering if y'all have any advice for the startups out there we do have a lot of startups listening as well For how to best manage that gap.
1:01:48 - David Knox
I think, yeah, the key thing is to understand exactly what are you doing with the music and understand the challenge of that. So I think, in some ways, if you are taking the role that we are where you're respecting, not changing, the master, that's helpful. I think it's helpful to actually look at what are the critical things to have, such as, I say somebody, people from within the music industry so sign up with some third parties at the beginning and then you know to be very open and transparent and have the same conversation with everybody. I think is helpful because people then look at what you're doing. You know, expect that from a technical point of view, some of the larger companies will want to do some tech due diligence quite early on, before the conversations get very far. So make sure you get past all of that and you understand that what you're developing will stand up within the marketplace. And I think the other thing is to have a very clear idea of what the end goal is.
You know for ourselves where we've got a mixture. The product itself is all developed by musicians, so it's coming from a place of music, which is very helpful. And then we have the side of the company that has a significant experience on the gaming side. So we were in a strong position of being able to define and understand. We still backed that up with some consumer research to make sure that what we were delivering to the market, the consumer or in this case, the gamer it was actually interesting to them and how did they want it to be delivered. So we sort of put a lot of the pieces in place, rather than just standing up and saying here's some very cool tech everybody. So I don't know how helpful that is, but that's sort of a little bit how we approached it in quite a deliberate way.
1:03:48 - Tristra
I think that's very helpful. I mean, I think the due diligence is really important and making sure that you can speak to all the stakeholders and having people who understand music and the music business won't hurt.
1:04:02 - David Knox
It absolutely won't hurt. And I think the other thing is quite early on identify, as we have, the people if I talk on the licensing front, but it's the same on us now going to the gaming market identify some key people who get the idea. They get what you're trying to do, and not literally, but they're prepared to hold your hand and help you through those first steps of the journey and help identify what it is, because they actually understand where you're going and they absolutely want to be first, they want to be part of it, they want to be there at lunch and that's really helpful and be prepared to build up some of those signing boards so you can whether it's down to pricing or the mix of genres or how we actually package it, you actually have some of that. So to say, we've been quite lucky that we're gaining momentum on the music side.
1:05:02 - Tristra
Thanks. This has been really fun All too brief journey through where music and games intersect right now. Thanks so much, David, and people will get to. If you're interested in talking more about music and games and how they can play so beautifully together, make sure to look up the Reactional Team at Music Tectonics.
1:05:23 - Dmitri
Thanks for listening to Music Tectonics. If you like what you hear, please subscribe on your favorite podcast app. We have new episodes for you every week. Did you know? We do free monthly online events that you, our lovely podcast listeners, can join? Find out more at MusicTectonics.com and, while you're there, look for the latest about our annual conference and sign up for our newsletter to get updates. Everything we do explores the seismic shifts that shake up music and technology, the way the Earth's tectonic plates cause quakes and make mountains. Connect with Music Tectonics on Twitter, Instagram and LinkedIn. That's my favorite platform. Connect with me. Dmitri Vietze, if you can spell it, we'll be back again next week, if not sooner.
The Music Tectonics podcast goes beneath the surface of the music industry to explore how technology is changing the way business gets done. Weekly episodes include interviews with music tech movers & shakers, deep dives into seismic shifts, and more.