In its first-quarter earnings call, streaming music service Spotify spoke in more detail about how advances in AI are affecting its business. On the plus side, the company provided an update on user adoption of its new AI DJ feature, which offers personalized music selections introduced by a realistic-sounding AI-powered DJ voice. But other advances in AI have the potential to cause harm, including using AI to create music that clones the voices of existing artists without their consent, leading to copyright issues and further complications for streamers like him
The latter issue recently made headlines when a song that used artificial intelligence to clone the voices of Drake and The Weeknd was uploaded to various streaming services, including Spotify, Apple Music, Tidal, YouTube and Deezer.
Spotify and others quickly dropped the hint, but faced criticism from publishers like Universal Music Group, who asked which “side of the story” they wanted “stakeholders in the music ecosystem to be on: on the side of artists, fans and human creative expression, or on the side of deep fakes, fraud and denying artists due compensation?
In the Q1 2023 investor call, Spotify was asked how it wanted to address this type of issue going forward.
In response, Spotify CEO Daniel Ek said the problem was complex and fast-moving and did not appear to have a proposed solution at this time.
“First of all, we recognize that this is an incredibly fast-paced and developing space. I don’t think in my history with technology I’ve ever seen anything move as fast as the development of AI right now,” he said.
Ek noted that Spotify had to balance two goals, including being a platform to enable innovation around creative works and one that needs to protect existing creators and artists. Both roles are taken very seriously, he said.
“We’re in constant dialogue with the industry about these things. And it’s important to state that there’s everything from … fake artist tracks falling in a bucket to … just increasing the use of A.I. to allow expression, which probably falls into the more forgiving and easier buckets,” continued Ek.
“These are very, very complex questions that don’t have a single straight answer… But we’re in constant discussion with our partners, creators and artists, and we want to strike a balance between enabling innovation and, of course, protecting artists.” added.
When pressed later on what material impact AI developments could have on business, Ek admitted that AI progress is “very cool and scary” and that there is a risk to the wider ecosystem .
“I think the whole industry is trying to figure it out and trying to figure it out [AI] training … I would definitely put that under the risk account because I think there is a lot of uncertainty for the whole ecosystem,” he said.
Meanwhile, the company is benefiting from the use of AI in other areas, Ek stressed.
For example, Spotify’s recently launched AI DJ feature has been gaining traction.
The feature is still in its infancy, having only started rolling out to Spotify users ahead of its Stream On product launch event in March, where the company also unveiled a revamped user interface, focused on video, powered by algorithms and machine learning, and new tools for artists and podcasters, among other things.
Although limited to the US market and still in beta, DJ AI now reaches “millions” of active users each week, Spotify reported, accounting for more than 25% of user consumption on days that use the DJ function.
That’s solid traction for the still-experimental new feature, and also a positive indication of the payoff of Spotify’s investment in AI technologies.
The CEO also discussed the potential of AI to help people create music without having to understand how to use complicated music production tools. He envisioned artists instructing the AI to make a song sound “a little more upbeat,” just by using a voice command, for example, or telling the AI to “add some congas to the mix.”
“This has the opportunity, I think, to make a meaningful case for this creative journey that many artists go on,” he noted.
Ek also thought it was important to stress the difference between something like an AI-powered feature like DJ and concerns around AI creating fake tracks.
“I think it’s important to separate AI DJ from the conversation with AI. So AI DJ, in and of itself, I think we’ve had nothing but positive reactions from across the industry. I think the rejection of AI from the rights industry ‘author or media labels and companies… it’s really about very important issues and issues like name and likeness; what is real copyright; who has the right to something where you upload something and say that it’s Drake, and it’s really not; et cetera. And those are legitimate concerns,” Ek said.
And obviously, those are things that we’re working on with our partners to try to establish a position where we both enable innovation but at the same time protect all the creators that we have on our platform,” Ek said.
The company reported that its first-quarter revenue rose 14% year-on-year to €3.04 billion, and its advertising revenue rose 17% year-on-year to €329 million. Spotify hit a new milestone with news that it has reached 500 million users, but its share of premium subscribers fell to a 40% share of paid and free listeners, with 210 million premium subscribers and 317 million in the advertising support plan.
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Ikaroa, a full stack tech company, has recently discussed the recent statement made by Spotify CEO, Daniel Ek, which suggests that AI technology could be both a “really cool” and “scary” thing for the creative industry as a whole. Ek claims that AI has the potential to “compose music, edit podcasts, and write songs”, among other impressive capabilities.
The dual nature of the technology presents both benefits and risks, something that has been stressed by Daniel Ek. AI has the capability to surprise and delight listeners with changes in the way music is being composed, listened to, and shared. On the other hand, AI could also represent a threat to brand loyalty, leaving creators and musicians in a vulnerable position.
At Ikaroa, we support diversity and acceptance, and understand the complexity of the issue. We believe that AI should be utilized as a tool not only to increase efficiency and quality of the creative process but also to reflect the world and the changing times. We remain committed to the exploration of the potential of AI technology in the creative process, while remaining aware of the ethical and moral implications of connecting to highly sensitive creative processes and projects.
We believe that cooperation between technology, companies, educators, artists, and communities are key to finding a successful balance between the benefits and risks of utilizing artificial intelligence in the creative industry. As such, we will remain open to dialogue and debate on the subject, and are looking forward to creating conditions in which AI can accurately and gracefully support the creative industry, without infringing the existing rights of intellectual property.
At the end of the day, it’s ultimately up to us to decide the kind of technology we want to use and how we want to use it. It is, after all, the human element that will ultimately make all the difference in our creative of the AI future.
