One of the highlights of Guy Oseary’s appearance at the annual meeting of the National Music Publishers Association (NMPA) last week actually took place after Oseary left the stage.
NMPA’s EVP and General Counsel, Danielle Aguirre, announced that a group of music publishers were suing Twitter for more than USD $250 million over “rampant infringement copyrighted music” on the platform.
Following Aguirre’s speech, NMPA President and CEO David Israelite told the audience: “This is no joke, Guy Oseary just texted Elon Musk” – presumably on the topic of music licensing.
Oseary’s impromptu involvement in the debate between music rightsholders and Twitter is a sign that you can take the exec out of the music business, but you can’t take the music business out of the exec. While Oseary has focused on tech investments for the past few decades, his heart still belongs to the music business.
And when Guy Oseary talks, even an exec at Elon Musk’s level would do well to listen. The music industry veteran who has managed talents like Madonna and the Red Hot Chili Peppers has become famous for his very successful investment partnerships with Ashton Kutcher.
One of the first of those partnerships, a fund called A-Grade Investments, is reported to have turned $30 million into $250 million with early investments into what would become major tech brands such as Uber, Airbnb and numerous music-related startups such as Spotify and SoundCloud.
During their conversation at the NMPA’s annual meeting last Wednesday (June 14), Oseary told Israelite that he partnered with Kutcher on business investments because, within Hollywood, the two of them were uniquely interested in startup tech companies.
“The only other person from the entertainment community that was doing the same thing was really Ashton,” Oseary told Israelite. “Ashton has an engineering background. I’m more of an A&R guy that just listens and he’s more of the guy going in there and going, ‘Does this tech work?’ And he’s sitting with the engineers and trying to understand… He was doing it, I was doing it. I called him one day and said ‘Why don’t we just do it together? No one else is doing this.’ And we did, we partnered up.”
More recently, another investment fund headed by Kutcher and Oseary, Sound Ventures, announced the close of a $240-million funding round to invest in “foundational” AI technology.
“What that means is – fast forward a few years from now. Every company we work with is going to be using AI in some way, some form,” Oseary said.
“And our thesis is is they’re going to plug into one of these foundational models so a year or two years from now, whatever company you’re working with… they’ll say ‘we use Google’ or ‘we use OpenAI,’ ‘we use Anthropic,’ and it’ll be one of five or six companies that you’re going to put all of your information on and use that model to help you with your business so that… $250 million is going to be used towards six or seven of these Investments for the things you plug into.”
Here are four other things we learned from Oseary’s chat with Israelite…
1: Investing in tech is a lot like working A&R in music – you’re looking for the next big thing
Oseary likens investing in new tech startups to the A&R work done in the music industry: in both cases, you’re looking for the “next big thing.”
In fact, for Oseary, becoming a business investor was very consciously a way to find new uses for the skills he developed in A&R.
“I thought, ‘I’m going to take all that I’ve learned through the music business, which is identifying talent and then helping that talent reach an audience, and do that [but] instead of finding the next big band, I would find the next big brand.”
Oseary continued: “All the things that I do now are very similar to [A&R work]. I always think in terms of the music business… When I’m meeting with a new founder [of a business], I think of them as an artist. I think of them as, they’re a visionary…
“They want to share their company, their idea with people, and do I feel that this person has magic? The same way that people in here [at the conference] have signed artists. Do they walk in the door and have magic? Do they have a great idea? That’s what I gravitate towards and then I use the skills [from the music business] to help bring that to fruition, to help with the narrative, help get it out and and build an audience, build a base.”
2: Much like when the iPhone came out, AI’s arrival poses a massive opportunity for building businesses
Oseary chalks up part of the success of his and Kutcher’s business investments to good timing.
“We were really there at the right time,” he said. “We started investing [at about] the same time as the iPhone, same time as the App Store, so you could scale a company very quickly, and today it feels the same with AI.
He added: “It feels very similar to that time period, where there’s a whole new wave that’s happening and it’s happening very quickly, where things can scale very quickly, so we again came together and we raised about $250 million to make investments. It’s a growth AI strategy.”
3: The question of human talent in the age of AI has not been addressed
While Oseary sees AI as becoming universal in business, including in the music business, he says the place of human talent in this new ecosystem remains unclear.
“I haven’t met an artist that is ecstatic about it,” Oseary said of AI.
“The idea that someone could just type in your name and write a song based on you is a real hard thing to grasp. I’ve spent a lot of my time on trying to figure out this problem… How do you protect the talent? That’s just been my position in life. How do you pay attention to how they get paid, how they’re protected?”
“What if a million people popped up your name and used you to write their song [using AI] and you owned half of a million songs and you were part of birthing a million songs?”
Guy Oseary, Sound Ventures
Oseary said that out of the last 20 companies he met with in music and AI, “20 out of 20 are showing me solutions that… have nothing to do with talent. They’re like ‘Oh yeah, you can make music here and you just pay 20 bucks a month. And you can make all these songs and you can use them in your shows and you can use them in your podcasts and you’re good.’ How is talent getting paid? How do they get paid moving forward? That’s where you hit a wall.
“So no one has really solved that problem and I’m spending a lot of time on either trying to solve it myself with what I know, or looking for someone out there who is solving it.”
But Oseary does have some ideas of what the future for talent could look like, even if talent today seems pessimistic about the options.
He said he recently had dinner with a pair of prominent songwriters and, “they weren’t so excited about this concept, that you could just type in their names and pop out a song. So I said ‘But what if a million people popped up your name and used you to write their song [using AI] and you owned half of a million songs and you were part of birthing a million songs?’ And they both were like, ‘Well, I never thought of it that way”.
4: The music biz survived the digital revolution, and it will survive the AI revolution too
For those in the music business suffering from jitters about AI, Oseary has a thesis that could help bring some much-needed calm to the situation. Just like music survived the digital revolution – when it seemed people would stop paying for music, now that it could be perfectly reproduced and shared digitally – so too will music survive the changes that AI brings.
“Digital music was scary. It’s easy to forget those moments but.. there was a time period where if you talked to a teenager about buying music it would be impossible. ‘I’m never going to pay for music, I just burn what I want. I don’t need to pay for music anymore,’” Oseary said.
“And… when it looked like we were in big trouble, Spotify appeared, and Spotify [said] ‘we figured out a way to take digital music and for people to want to pay for it.’ [Spotify said] ‘we’re going to give it to you in a way that you will want to pay for it and in a way that talent could get paid.’
“By the way, it took time. When we invested [in Spotify] they didn’t even have a deal with labels in the U.S… They started in Scandinavia and proved the model out, proof of concept that it’s not going to kill the music business, that it’ll actually help.”
“There was a time period where if you talked to a teenager about buying music it would be impossible. ‘I’m never going to pay for music, I just burn what I want. I don’t need to pay for music anymore.'”
Guy Oseary, Sound Ventures
With AI, the business model that saves talent is not yet apparent, Oseary said.
“There’s definitely a business model for where artists don’t get paid, but that’s not my position. There’s many models for investors to invest in where you can get all the songs you want, [they’re] made by AI and you never have to pay talent ever again.”
But Oseary predicts legal problems for those business models.
“If you just say ‘I want a song which is atmospheric’ or ‘hey, I want a song for the beach, you’re not prompting ‘I want a song that’s like Bob Dylan’,” Oseary said.
But if you ask for a song that sounds like Bob Dylan, “it’s like you just prompted Bob Dylan to write that song,” he says.
“So there’ll be legal issues across the board here. I’m trying to find my position… either through investments or through being proactive in something that can bring value to the talent.”Music Business Worldwide