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Today, we'll discuss how artificial intelligence could impact the music industry.

All this, and more, in just 5 minutes to read.

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Trivia

Music Industry Econ 101

AI assistants for all

A quick story to illustrate the power of artificial intelligence on the music industry:

It’s 2035, and artificial intelligence has transformed the music world. What had once seemed like a gimmick or futuristic concept is now woven into every aspect of how music is created, produced, and experienced.

Take Marcus, a young, independent artist just starting to make a name for himself. Like most up-and-comers, he couldn't afford a full studio band or team of producers and songwriters. But he didn't need any of that — he had an advanced AI music assistant by his side, 24/7, whenever needed. 

After laying down a scratch vocal track, Marcus fed it into his assistant’s neural networks. The AI analyzed his melody, lyrics, and vocal stylings in seconds. It then generated a full instrumental arrangement pulling from its knowledge of musical genres, styles, and production techniques.

"How about we try a neo-soul vibe with some jazzy chord progressions?" Marcus requested. The music assistant seamlessly morphed the accompaniment, adding lush vocal harmonies synthesized in Marcus's own voice.

With the tracks AI-produced, Marcus uploaded them to his distribution platform. The album is populated across all streaming services, with dynamic AI-mastering that optimizes the audio quality for each platform and playback system.

Soon, Marcus's music was being promoted by the streaming services' AI curation engines, which use advanced audio profiling and listener preference modeling to target his songs to fans most likely to embrace his signature sound.

At a live show, Marcus's performance was augmented by his assistant, conducting real-time transition fills, harmonies, and even brief AI-composed interludes between songs based on analyses of the crowd's real-time energy levels and feedback.

Meanwhile, across town, an anonymous bedroom producer was lifting lyrics, beats, and instrumental hooks authored by his own AI assistant, then releasing them as sample packs to help aspiring artists kickstart their own music creation.

Thanks to AI, the music world has been democratized like never before. But it also reignited debates around originality, artistry, and intellectual property.

Everything’s disruption

Music has gone from vinyl to CDs to streaming to another big question: What will happen in an age of artificial intelligence?

As the chairman of Universal Music Group, Lucian Grainge says that in the record business, “everything’s disruption, disruption, change, change. I’m used to disruption.”

Universal is the biggest of the Big Three label groups, bigger than Warner Music and Sony. Over half of Spotify’s 20 most streamed artists of all time are Universal artists, but even he’s unsure what the future holds. 

Is AI a threat to the business model? Will it mean a format change? Will AI become the new radio? Will AI complement human creativity, or will it deem human creators unnecessary? There are also larger questions about whether copyrighted material can be used as training data for AI. 

Over the past few decades, nearly everything about the industry has changed, from music creation to selling and consuming. You once needed to physically sell records in stores. Now, distribution is as easy as hitting “Upload” or “Play” on a phone from virtually anywhere in the world. 

Music promotion used to be tied to the radio. Now, streaming platforms' algorithms determine playlists. Once derived from album sales, revenues largely come from royalty payouts from streaming services to artists (and concerts). Even music executives have changed: Once music junkies, they’re now a mix of lawyers, private-equity managers, turnaround specialists, and tech leaders. 

Although print media, TV, and film have struggled to adapt to digital transformation, the music industry is more profitable than ever. Streaming revenues reportedly surpassed $17 billion in 2022.

Could AI supercharge that number to hundreds of billions?

AI optimization

Another story.

Sarah was an up-and-coming pop artist working on her debut album. She had incredible raw vocal talent but struggled with songwriting and production. That all changed when she met Claude, an advanced AI music assistant.

During writing sessions, Claude would analyze Aisha's melodies, lyrics, and chord progressions in real-time, then suggest complementary sections or optimizations to craft more radio-friendly song structures. The AI could generate full "skyscraper" vocal harmonies in her own voice.

When it came time to record, Aisha simply laid down her lead vocals over barebones rhythmic tracks created with Claude's help. The AI then composed and produced the entire instrumental arrangement and mix — pulling together programmed drums, synthesized basslines, sampling orchestral elements, and generating guitar and keyboard parts in various styles.

Sarah’s record label was stunned by the quality of the "AI-assisted" recordings, which rivaled tracks by top artists and producers.

The AI optimization didn't stop there. When her first single dropped, Claude analyzed streaming data and social media chatter to identify potential hot spots for viral growth. It then coordinated promotional campaigns and targeted playlist pitching to boost the song on TikTok, Instagram, and other platforms.

Critics remained divided over whether the "AI-pop" sound compromised artistic integrity. But there was no denying that AI had opened new creative and commercial avenues for musicians like Sarah, who may have previously struggled to break through and find their target following.

Use cases

Other examples of AI in music include:

Music creation: AI can generate music autonomously or assist human composers by providing composition, arrangement, and production tools. AI algorithms can analyze existing music to generate new compositions in a similar style or create novel sounds and melodies.

Content creation and remixing: AI tools can remix and mash-up existing songs, creating new versions or entirely original compositions.

Copyright protection: AI algorithms can help detect copyright infringement by comparing new compositions to existing copyrighted material.

Music analysis and insights: AI-powered analytics tools can analyze trends in music consumption, identify emerging artists, predict hit songs, and provide valuable insights for record labels, artists, and marketers.

Accessibility and inclusivity: AI technologies make music production more accessible to people with disabilities by providing tools for creating, composing, and performing music using alternative interfaces and adaptive technologies.

Live performance and interactive experiences: AI could create dynamic, interactive live music experiences where the music adjusts and responds to audience input or other variables.

Final thoughts

AI is already widespread in music. The Beatles recently used AI to isolate John Lennon’s voice from a 1978 demo, stripping out the other instruments to build a new song, “Now and Then.” Spotify and Apple Music rely on advanced AI algorithms to suggest songs to people based on their listening preferences. 

Musicians are also embracing tools like BandLab, which can help songwriters write songs and create recordings based on text prompts. A new YouTube tool allows anyone to type in something like “A song about love, chasing your dreams, and dealing with grief, with a slightly upbeat tone at the end,” and a song is generated in seconds.

Questions remain. What does this mean for artists who fear they’re being replaced? Should AI companions be able to assist artists but not create all new music? Where do you draw the line, and how? Or, as Time Magazine recently asked: How will our understanding of memory and legacy change if any voice throughout history can be re-animated? 

“It seems like the tech industry thinks that everyone wants a shortcut or a solution to creativity,” one AI executive and musician notes. “That’s not how imagination works. Anyone who’s studied flow state or spent time with people who are creating music knows that we love that process.” 

Dive deeper

For more, here’s The Financial Times’ video on record deals and how artists make money in the music industry.

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