Make no mistake about it, record labels are all-in on Artificial Intelligence. However, recent announcements by iHeartRadio and others show that not everyone is on board. We may be heading toward a showdown on how the AI music story plays out.
This past week, the music industry’s three largest labels—Universal, Warner Bros., and Sony—all inked new licensing deals with AI music streaming service “Klay.” The AI music platform allows users to create and remix licensed music from the comfort of their phones, computers, or makeshift studios—literally anywhere.
The part that no one wants to talk about is that this agreement, like many others in the music AI realm, will allow hundreds of thousands of songs to now officially—and more importantly, legally—enter the AI music ecosystem. The more artists and songs that enter it, the easier it is for the system to replicate their music while bypassing the human element.
The ‘Hits’ Keep Coming
The Klay agreement news came just weeks after Warner Music Group settled a copyright infringement case with the popular AI music startup “Udio,” which allows users to create music simply based on text prompts. In recent legal filings, Udio claimed that they have “tens of millions of users” utilizing their platform, which is not ideal for professional songwriters. Both WMG and Udio will now enter into a licensing deal for future AI music creation for a new service set to launch in 2026.
If that wasn’t enough, Udio’s competitor, another popular AI-generated music platform called Suno, announced last week that they raised $250 million for a $2.45 BILLION valuation! (Barrett Media founder Jason Barrett recently wrote about his experience when he, as a music fan, wanted to see what the Suno craze was all about. (You can read his thoughts here.)
We’re now talking about billions of dollars. In other words, may the odds be ever in future musicians’ and producers’ favor.
Understandably, music labels’ new AI business model shift is facing a ton of backlash—not only from fans, artists, and songwriters, but now from within the music broadcast world as well.
Radio Responds
Last week, iHeartRadio’s Chief Programming Officer and President Tom Poleman announced that the country’s largest music broadcast company would no longer play AI-generated music.
In a letter sent to all employees, Poleman announced the company’s “Guaranteed Human” policy, a new strategy in which they would only support and play non-AI-generated music.
“We’re guaranteed human. We don’t use AI-generated personalities. We don’t play AI music that features synthetic vocalists pretending to be human. And the podcasts we publish are also Guaranteed Human,” Poleman wrote. The new policy went into effect this past Monday, according to Billboard.
To put further emphasis on the pro-human-music promise, Poleman said that all on-air DJs were mandated to add a line to their “hourly legal IDs about being ‘Guaranteed Human.’”
“Remember this isn’t a tagline, it’s a promise. And it’s part of every station’s personality.”
You can be sure that record labels are probably not too excited about Poleman’s artists’ loyalty pledge, especially as they continue to cut massive deals within the AI music world.
I’d like to think that Poleman read my column last month, where I suggested that there is an economic play in being Anti-AI in the music world:.
I’d argue that this actually presents an opportunity for some stations or platforms to gain an edge and listener base by declaring they are “The Anti-AI” station, where listeners won’t ever hear AI-generated or created music. Music fans will appreciate the loyalty to authenticity.
Regardless, Poleman and iHeartRadio’s “Guaranteed Human” announcement was met with massive praise across social media from music fans and artists (although some would also appreciate iHeart not continuing to lay off human radio DJs).
AI Is Divisive, Controversial
Record labels argue that they are proactively seeking ways to incorporate the inevitable AI component that will eventually be prominent not only within music, but in humans’ daily lives. Whereas in the past labels were behind the ball (Napster, mp3s, streaming), they are now attempting to work with this new AI technology rather than fight it.
In a statement regarding the company’s Udio deal, Sir Lucian Grange, Chairman and CEO of Universal Music Group, explained that “These new agreements demonstrate our commitment to do what’s right by our artists and songwriters, whether that means embracing new technologies, developing new business models, diversifying revenue streams, or beyond.”
However, one could also argue that labels are betting that music fans, in the end, won’t truly care if the music they listen to is AI-generated. Case in point: according to Forbes, at least 10 AI artists have appeared on the Billboard Music Charts so far.
This includes Gospel and R&B “singer” Xania Monet, who has quickly become a star on the charts despite being AI-generated. Country AI artist Breaking Rust reached Billboard Country Digital Songs #1 earlier this year as well, with millions of Spotify plays.
Once again, these “musicians” do not physically exist. Hence the standoff that the music industry is currently in.
During a conversation with prominent producer and singer-songwriter Martin Johnson, he pointed out that many major record labels have been actively purchasing music legends’ song catalogs. “Why do you think there is such a huge push to buy up catalogs in the last few years? It’s all an AI play.”
Based on this past week’s AI announced partnerships, Johnson may be onto something, and one can understand the trepidation of artists and producers who may not think the labels have the noblest of intentions.
Labels Proceed With Caution
From a public relations standpoint, it doesn’t help the labels that the AI debate has now become a highly contentious one, especially on social media.
The repercussions of delving into the AI world when so many young people are struggling to find work in the current job market, while at the same time being the record labels’ key demographic, can escalate quickly with unintended consequences. The last thing they want to hear is that more jobs are being lost to AI.
Recently, Coca-Cola faced tremendous backlash after revealing they once again used AI-generated content for their latest Christmas holiday commercial. Needless to say, the comment sections were not amused, and the company was trending for all the wrong reasons.
“The most profitable commercial in Pepsi’s history,” one commenter on the company’s YouTube page wrote.
Alex Hirsch, creator of Disney’s television series Gravity Falls, had a more succinct opinion when he tweeted, “FUN FACT: (Coca-Cola) is ‘red’ because it’s made from the blood of out-of-work artists!”
If you think they’re joking, you should think again, as the anti-AI movement has led to boycotts and even people canceling their subscriptions to platforms that embraced AI. Just ask Spotify.
Is AI Music Inevitable?
The sheer overwhelming power of AI, the opportunities it presents, and the cost-cutting capabilities it offers were never going to go unnoticed by record labels. Creativity be damned in the end when you’re dealing with shareholders and checking stock prices every morning.
The ease at which these AI music platforms can quickly and cheaply spit out catchy tunes and hooks in a matter of seconds makes it cost-effective from the record label’s standpoint. In this current “Swipe, Swipe, Swipe” social media mentality, why bother spending money or wasting time on a tune that may be a hit on Friday but is already old news by Monday?
With an ever-growing AI music ecosystem, labels will eventually not have to rely on human artists or producers as much as they have in the past. It’s already happening, hence the concern that many artists and music supporters are seeing firsthand.
From an economic standpoint, however, can you really blame labels for delving into the AI music market?
For many, the answer is: Yes, yes you can.
Barrett Media produces daily content on the music, news, and sports media industries. To stay updated, sign up for our newsletters and get the latest information delivered straight to your inbox.
‘Gunz’ has been a staple in the music, sports and news industry for over a decade. From his first on-air appearances on MTV and FUSE television as a teenager to broadcasting nationally with Don Imus, to most recently hosting the Vans Warped Tour on Amazon Music, he has become one of the industry’s most insightful and trusted voices. As host of idobi Radio’s ‘The Gunz Show’ (80K+ Weekly Listeners) for the last fifteen years, Gunz has built a reputation for Breaking Bands and Breaking News, including notable debut interviews from bands such as Twenty One Pilots, Cobra Starship, fun., and viral interviews with artists such as Machine Gun Kelly, All Time Low and The All American Rejects. Whether it’s hosting red carpets or exclusive sit-downs with media’s biggest names from Clive Davis to Dana White, Gunz answers not only “What” is happening, but more importantly – “Why?” for programmers, publicists, artists, entertainers and fans alike.
