Aug 9th | Believe's Big League Bid, Suno & Udio Admit Music Usage, and Roblox's Revenue Surge

Hello everybody, 

Welcome to this Indie Inside newsletter. Today is August 9th, and we’re about to dive into three small stories with big implications. I think that each of today’s scoops has the potential to reshape the independent music industry. Before we look, I have a word from our sponsor, my company, Habitat Financial .  

If you’re struggling to pay your artists on time or want to provide your clients with better royalty reporting, it’s time to check out Habitat Financial. Habitat helps music companies of all sizes handle their financial operations. Regardless of whether it’s invoicing, royalty processing, payments or expense management, Habitat will help you spend less time and money on mind-numbing tasks.  The music industry is changing fast, stop spending your time roleplaying as an accountant and start spending your time making a difference for your artists.  

Alright, let’s dig in.  

Believe Takes Full Ownership of Doğan Music Company 

Believe has finalized a deal to take over the Turkish record label, @Doğan Music Company. Believe has had a stake in the company for some time now, but on August 6th they announced their full takeover by buying up the last 40% stake for $42 million. This move not only makes Believe the proud owner of Turkey’s largest independent label but also signals a significant shift in the global music industry dynamics. 

We're seeing more and more big players like Believe absorbing independent labels. Just last month, Believe announced a 25% stake in Global Records —one of Eastern Europe’s largest indies. Acquisitions like this fundamentally change the industry's competitive landscape. This consolidation not only threatens the dominance of the major labels but can hugely affect indie artists. Believe is already known for its high distribution fees and by gaining a competitive edge through M&A, they could force other players to drive up their fees as well. 

AI Music Firms Suno and Udio Admit to Using Copyrighted Music in Training 

The industry’s two leading AI music firms Suno and Udio have admited to using unlicensed music to train their technologies in a new response to lawsuits from the major labels. Suno explained that “training data includes essentially all music files of reasonable quality that are accessible on the open Internet, abiding by paywalls, password protections, and the like, combined with similarly available text descriptions.” The admission has accelerated an already raging debate on the ethical use of AI in music creation. 

These lawsuits are likely to set important legal precedents for the use of AI in music production, affecting copyright laws on a broad scale. The outcomes of these cases will not only influence how music is utilized and monetized by AI technologies, but will also impact the quality of AI-generated music. This is a crucial moment that could define the boundaries of creative rights in the digital era protect and the underlying human element in music creation.  

Roblox's Financial Growth Amidst Management Changes 

Roblox posted a whopping 31% increase in revenue, hitting $893 million in the second quarter. This financial boost comes amid the surprising exit of their CFO and as daily active users soar to a new high of 79.5 million. 

Roblox and its contemporaries are and will continue to become a major venue for music consumption for Gen Z and Gen Alpha. Their ventures into music through virtual concerts and interactive experiences are marking it as a pivotal platform for artists seeking fresh audiences and innovative revenue streams. The platform's strong financial performance and soaring user engagement suggest that the platform is ripe with opportunities for music integration and branding partnerships by artists who are bold enough to build a strategy around it. 

It also presents a challenge for the industry. As metaverse platforms like Roblox become bigger and as more metaverses are willed into existence, how do we track and monetize the usage of music in UGC on those platforms? Unlike YouTube, UGC on Roblox can be ephemeral, and unlike Twitch, Roblox blurs the line between host, participant, and observer. What happens when players in a certain area of a metaverse map hear a recording, but not others? What is the audience size? Many of these questions will be answered by advancements in music recognition and data technology, but it’s also likely that some of these issues will have to be sorted out in the courts.  

As an artist, I’d recommend staying on top of these developments as it seems almost certain that future generations will continue to engage more and more with platforms like this.  

Ok that it for today. Have a great weekend! 

Calvin Windschitl