@SAGAFTRA and Major Labels Reach a New Sound Recording Agreement With AI Protections

Looks like both sides listened and respected each other so no strike necessary. And yet there are groundbreaking first-time AI protections for musicians and vocalists. Amazing what can happen when you actually respect the workers, looking at you YouTube. And guess what? The workers get to vote on the deal. Imagine if songwriters could do the same.

PRESS RELEASE

SAG-AFTRA and leading record labels reached a tentative multiyear agreement on a successor contract to the SAG-AFTRA National Code of Fair Practice for Sound Recordings.

Covering the period starting Jan. 1, 2021, and ending Dec. 31, 2026, the agreement includes Warner Music Group, Sony Music Entertainment, Universal Music Group and Disney Music Group.

The SAG-AFTRA Executive Committee unanimously approved the tentative agreement on Wednesday, April 10. It will now be sent to members for ratification.

SAG-AFTRA National Executive Director & Chief Negotiator Duncan Crabtree-Ireland said, “SAG-AFTRA and the music industry’s largest record labels have reached a groundbreaking agreement establishing, for the first time, collective bargaining guardrails assuring singers and recording artists ethical and responsible treatment in the use of artificial intelligence in the music industry. It is a testament to our mutual unwavering commitment to work together to safeguard the rights, dignity and creative freedom of our members.

“This agreement ensures that our members are protected. SAG-AFTRA stands firm in the belief that while technology can enhance the creative process, the essence of music must always be rooted in genuine human expression and experience. We look forward to working alongside our industry partners to foster an environment where innovation serves to elevate, not diminish, the unique value of each artist’s contribution to our rich cultural tapestry.”

The Record Label Negotiating Committee said, “We are pleased to reach this agreement with SAG-AFTRA and continue our strong partnership as we enter this exciting and fast-moving new era for music and artists. Together, we’ll chart a successful course forward, embracing new opportunities and facing our common challenges, strengthened by our shared values and commitment to human artistry.”

The artificial intelligence guardrails take effect immediately upon ratification. The terms “artist,” “singer,” and “royalty artist,” under this agreement only include humans. In this agreement, clear and conspicuous consent, along with minimum compensation requirements and specific details of intended use, are required prior to the release of a sound recording that uses a digital replication of an artist’s voice.

Additional highlights among the contract gains include increased minimums, health and retirement improvements, and an increase in the percentage of streaming revenue to be covered by contributions, among other gains.

Warner Music Group Free Streaming Advocates Lose Another $100m in 2014… Can’t Make This Up…

We can’t help but think these two things are related. Read the full stories at DMN… Here and Here

WarnerMusicGroupLosses

 

 

WarnerMusicFreeStreaming

So how’s that $3.00 per “user” annual ARPU working out from free streaming?

It’s amazing to us that the current conversation and controversy is still focused on the free tier. We’re not entirely certain that Spotify can even work at $10 a month / $120 per yer, per subscriber. The number of subscribers needed to replace the revenue from transactional sales exceeds those of any current mature subscription business.

It will take  60 Million PAID subscribers at $10 a month to generate about $7.2b in gross revenues annually. It takes another 30 Million (or 90 Million PAID Total) to come up with $7.5b payable to rights holders. Ninety Million. Paid…

Here’s some context for the chart above. Netflix only has 36m subscribers in the US, no free tier, and massive limitations on available titles of both catalog and new releases. Sirius XM, 26.3m in the US as a non-interactive curated service installed in homes, cars and accessible online. Premium Cable has 56m subscribers in the US paying much more than $10 a month and also with many limitations. Spotify… 3m paid subscribers in the US after four years. Tell us again about this strategy of “waiting for scale.” Three Million Paid… Three…

* 3m Spotify Subs Screen Shot
* 26.3m Sirius XM Subs Screen Shot
* 36m Netflix Subs Screen Shot
* 56m Premium Cable Subs Screen Shot
* $7b Music Business Screen Shot

It’s just math.


 

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