The following guidance is for music-makers and managers who are approached by record labels, music distributors or music publishers about deals they have agreed with AI companies, usually inviting the music-maker to opt into the deal, and/or seeking additional rights, consents or permissions that are required by the deal.
1. Be very specific when granting consent or rights.
● Where you give consent for AI training, be wary of granting wide-ranging training rights. Try to ensure any consent only applies to specific named AI services.
● Your label or publisher may argue that they already have the necessary rights to include your music in AI training deals – if you take a different view, don’t inadvertently agree with the label or publisher’s position in a contract term.
● Where you give consent to use your music, lyrics, voice, likeness or name on the output, be clear on which AI services and which specific works and uses this consent relates to. Be wary of terms that allow your music, lyrics, voice, likeness or name to be used on a wide-ranging basis.
● A label or publisher may say that you can opt in to AI deals on a narrow and specific basis but then send contract terms seeking much more wide-ranging rights and consent. Ensure that the contract terms fully reflect your understanding and provide the necessary restrictions and control.
● Where you are a co-writer on a song, or have guest artists or session musicians on a recording, be clear that you are only granting rights and providing consent in your own capacity, and that separate consent will be required from other music-makers.
2. Be wary of long-term commitments
● The music AI market is evolving rapidly and it is not yet clear which products and services will take off, and how the market will change in the coming years. Therefore seek to negotiate short term commitments with labels and publishers around AI deals, so that terms can be regularly reviewed as products and the market evolve.
● Shorter term commitments should work for both parties. Because the AI market is evolving and is as yet unproven, both rightsholders and music-makers will need to experiment without fully understanding how any one product or service will develop, and what the actual commercial opportunity may be. This is fine providing there is an opportunity to review your relationship with your label or publisher once the business model is better understood.
● If you grant consent for your music to be used in AI training on a short-term basis, clearly state that that means your music will have to be removed from training datasets if you decline to provide new consent when the initial term expires. Though also be aware that – while most AI companies regularly re-train their models – they are often building on earlier iterations trained with your music.
3. Seek clarity on all aspects of the deal
● There are several layers to a deal between a label or publisher and an AI company, and it’s important you fully understand what is being proposed and how things will work.
● Questions to consider…
| > Is the label or publisher receiving a lump sum payment from the AI company and/or a share of future revenue? How is this being calculated? > How is the label or publisher allocating money it receives to individual recordings and songs? For example, will the AI company provide data? Or will proxy data be used (eg what you are allocated is linked to Spotify streams)? Or will the rightsholder have its own metrics? Or will money simply be equally split across all works? > What royalty rate will be applied to this income stream? > If you are being asked to opt-in to both basic AI training on the input and the use of music, lyrics, voice, likeness and/or name on the output, how do these two things differ in terms of how the rightsholder is paid, how money is allocated to individual works, and the royalty rate paid to the music-maker? > For each service, can you opt-in on a work by work basis, or do you have to opt in all your works? Is this rule the same or different when it comes to basic training and the use of music and lyrics on the output? > Is the label or publisher also receiving a legal settlement payment, an advance and/or equity as part of the deal? If so, how will this be shared with music-makers? > Will any of these music-maker payments be used to pay off unrecouped balances? > If you’re talking to a label – how is the publishing being handled? Will the song or composition earn more or less the same as the recording? > If you’re talking to a publisher – will additional income be collected by PRS for this use of music and, if so, in what circumstances? > If the rightsholder is licensing both recordings and songs, how do they plan to allocate the revenues between the two? |
● CMM has put together a template letter you can use when contacting your business partners to ask these questions about their AI deals.
● In 2024 the UK music industry signed up to a ‘transparency code’ that says labels, distributors and publishers that negotiate licences with digital service providers (DSPs) should communicate to music-makers…
| > how each music-maker’s remuneration is calculated in connection to each DSP’s service. > a clear policy or policies relating to the distribution of fixed fees, ie when and how these revenues are shared with and reported to music-makers. |
● CMM believes that these commitments should be applied to AI deals.
4. Value your rights
● Obviously you need to decide if the commercial terms being offered by your label or publisher are fair and reasonable, and work for you and your business.
● However, these are entirely new uses of music that were not anticipated by old agreements, and for record deals it seems inequitable to suggest that conventional CD or streaming royalty rates should be applied. Instead higher licensing rates should be the norm.
● It is also important to consider how income from AI deals is split between recording rights and song rights – because in streaming much more money flows to the recordings and this has a big impact on how much songwriters earn. This must not happen with AI deals. Music-makers should get clarity on the recordings/songs split when discussing AI deals with their business partners.
● Also be clear on how royalties will be calculated, and whether any deductions or discounts will be applied, and how you will share in any other benefits received by the rightsholder.
5. Get expert advice
● If possible, seek legal advice before signing any deal. Some labels are already speaking to some law firms about these deals, so your lawyer may already be able to answer some key questions.
● If you do not have access to a lawyer, contact whichever CMM organisation you are a member of and they will try their best to provide or sign-post you to guidance.