This week, Universal Music Group shocked the trade by settling its copyright lawsuit in opposition to AI platform Udio and saying plans for a licensed AI music streaming service launching in 2026.
Meanwhile, the European Commission restarted its probe into UMG’s $775 million Downtown acquisition, setting a new February 2026 deadline for its resolution.
Elsewhere, UMG revealed it struck a new YouTube licensing settlement that includes AI guardrails, as the most important posted Q3 revenues of EUR €3.02 billion, up 10.2% YoY.
Also this week, DistroKid launched Direct, a new direct-to-fan merch platform permitting artists to promote T-shirts and different merchandise whereas retaining 100% of income.
And it was revealed that OpenAI is reportedly working by itself generative AI music device, as the corporate hit a USD $500 billion valuation.
Here are a number of the largest headlines from the previous few days…
1. UNIVERSAL MUSIC SETTLES UDIO LAWSUIT, STRIKES DEAL FOR LICENSED AI MUSIC PLATFORM
Universal Music Group introduced on Wednesday (October 29) that it has settled its copyright infringement litigation in opposition to AI music platform Udio, marking a landmark shift within the trade’s strategy to AI. The firms will collaborate on “an modern, new business music creation, consumption, and streaming expertise” set to launch in 2026, with the subscription-based platform permitting customers to customise, stream and share music inside what they describe as a “licensed and guarded surroundings.”
The settlement consists of compensatory funds plus new license agreements for recorded music and publishing that may present additional income alternatives for UMG artists and songwriters. The information arrives simply over a 12 months after the RIAA, on behalf of all three main file firms, sued Udio and peer Suno for “mass infringement” of copyright. UMG’s settlement with Udio comes as Universal and the opposite majors proceed pursuing copyright claims in opposition to Suno… (MBW)
2. EU RESTARTS PROBE INTO UMG’S DOWNTOWN DEAL, SETS NEW DEADLINE TO MAKE DECISION
The European Commission has restarted its probe into Universal Music Group’s proposed $775 million acquisition of Downtown Music Holdings after briefly pausing the inquiry in September whereas ready for requested data. With the probe now restarted, the EC has set a new provisional deadline of February 6, 2026 to determine whether or not to clear the merger (with or with out situations) or prohibit it totally if competitors considerations can’t be adequately addressed. The EC had initially set November 26 as its deadline following its Phase II investigation into the deal, however ‘stopped the clock’ on September 2.
The EC stated in July that it had “preliminary considerations that the transaction might permit UMG to scale back competitors within the wholesale marketplace for the distribution of recorded music within the European Economic Area (EEA) by buying commercially delicate knowledge of its rival file labels…” (MBW)
3. UMG HAS STRUCK A NEW YOUTUBE DEAL THAT INCLUDES ‘GUARDRAILS’ AROUND AI… AND 3 OTHER THINGS SIR LUCIAN GRAINGE SAID ON UMG’S Q3 EARNINGS CALL
Universal Music Group revealed throughout its Q3 earnings name on Thursday (October 30) that it has accomplished a complete new licensing deal with YouTube, marking the corporate’s third main “Streaming 2.0 settlement” following offers with Spotify in January and Amazon in late December 2024. Chairman & CEO Sir Lucian Grainge advised traders the settlement “covers each recorded music and music publishing” and consists of “actually necessary guardrails and safety for our artists and writers round gen AI content material.” Chief Digital Officer Michael Nash confirmed the deal addresses improved monetization of short-form video, which he referred to as “an goal that we’re actively advancing throughout a number of deal renewal discussions.”
The announcement got here as UMG posted Q3 revenues of €3.021 billion ($3.53bn) throughout all divisions, up 10.2% YoY at fixed foreign money. Grainge additionally expressed confidence in AI’s potential to remodel the trade, evaluating it to the streaming revolution 15 years in the past and revealing partnerships with each Udio and Stability AI. Meanwhile, bodily music gross sales surged 23% YoY to €341 million, pushed by preliminary shipments of Taylor Swift releases and energy in new releases, notably in Japan, with CFO Matt Ellis noting that followers are exhibiting they “need to interact in many various methods with our artists” together with by way of collectible vinyl purchases… (MBW)
4. DISTROKID LAUNCHES NEW PLATFORM FOR ARTISTS TO SELL MERCH DIRECTLY TO FANS
DistroKid has launched Direct, a new direct-to-fan gross sales platform that marks the music distributor’s enlargement past audio and video distribution companies and into merchandise gross sales. The characteristic, rolling out in beta to choose artists earlier than a broader launch within the coming weeks, permits musicians to arrange on-line shops to promote merch like T-shirts, tote baggage and mugs printed with album art work. While DistroKid will deal with manufacturing and transport by way of on-demand manufacturing, artists utilizing Direct will retain all income from gross sales, with the service costing $6 per thirty days.
The transfer represents DistroKid’s effort to diversify its choices to the greater than 2 million artists it serves, with the corporate claiming it handles 30% to 40% of new music releases globally. Direct builds on expertise from direct-to-fan platform Bandzoogle, which DistroKid acquired in 2023, with the corporate planning to add extra merch choices and fan engagement instruments within the coming months. The merch push places DistroKid in competitors with platforms like Bandcamp, which already affords direct gross sales instruments to musicians and just lately launched Bandcamp Clubs, a subscription service giving customers entry to month-to-month file picks and unique artist content material… (MBW)
5. OPENAI, VALUED AT $500BN, REPORTEDLY WORKING ON GENERATIVE AI MUSIC TOOL
OpenAI, the $500 billion-valued firm behind ChatGPT and Sora, is planning to enter the generative AI music area with a device that may create music from textual content or audio prompts, in accordance to The Information. Sources advised the publication that OpenAI’s device could possibly be used to add soundtracks to movies or instrumental accompaniment to vocal tracks, although it’s unclear if the corporate plans to launch a device that may create full songs from scratch like Suno and Udio. The firm has been working with college students on the Juilliard School of music, with college students annotating music scores to create coaching knowledge.
OpenAI’s entry would convey it into an more and more crowded area that features Suno and Udio in addition to gamers like ElevenLabs, Boomy and Beatoven.
The transfer comes because the music ecosystem is already being inundated with AI-generated materials, with Deezer reporting in September that 28% of tracks uploaded to its platform have been absolutely AI-generated, up from 18% in April. Some “AI artists” have racked up hundreds of thousands of performs on Spotify, elevating considerations about AI songs taking an more and more massive share of the streaming royalty pie… (MBW)
Partner message: MBW’s Weekly Round-up is supported by BMI, the world chief in performing rights administration, devoted to supporting songwriters, composers and publishers and championing the worth of music. Find out extra about BMI right here. Music Business Worldwide