Warner Music CEO says "creation-based" revenue for artists and songwriters set to grow
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Warner Music Group CEO Robert Kyncl said the music label's "deftly negotiated" deal last year with AI music startup Suno, which led to the launch of co-created AI music models Thursday, is the start of what will become a new, growing revenue stream for artists and songwriters.
Why it matters: The music industry's streaming transition prepared it to turn AI's copyright threat into a new licensing model. If successful, it could mark a new growth era for the music business, just as streaming did.
Zoom in: Kyncl said Suno's v6 models mark the first time WMG's talent will be able to earn revenue from music creation in addition to consumption, according to a staff note obtained by Axios.
- WMG "artists and songwriters will share in revenue generated by Suno's more than 2 million paying subscribers," he noted.
- "This new creation-based revenue stream will only grow as our other partners — from DSPs like Spotify to startups like Udio, Klay and Stability — launch their own AI-powered fan-engagement tiers and platforms that allow fans to remix and interact with music they know and love," he wrote.
Catch up quick: WMG settled copyright lawsuits against Suno and rival AI music firm Udio last year.
- Major record labels including WMG, Sony and Universal Music Group had filed copyright lawsuits against Suno and Udio in 2024, claiming their models were trained on stolen works of artists and songwriters.
- As part of its WMG settlement, Suno agreed to shut down its original large language model and co-build a new one with labels on fully-licensed material.
Zoom out: Suno and Udio's settlements proved how much legal leverage music labels have over AI startups, especially when they band together.
- In his note, Kyncl said that while licensing is the "most effective lever" WMG has to protect its artists and songwriters, legislation and litigation are still important.
What to watch: Last month, WMG and Sony Music sued Anthropic, alleging "one of the largest and most blatant ongoing thefts of intellectual property in history."
Go deeper: How the music industry survived the digital transition
