AI ‘will bring the biggest revolution the creative sector has seen,’ Björn Ulvaeus says in CISAC’s latest annual report

CISAC President Björn Ulvaeus.

CISAC is urging copyright holders the world over to fight for their rights amid the rapid growth of AI.

In its latest annual report, released on Wednesday (May 22), the global umbrella group of royalty collection organizations urged rightsholders to “act now” in the face of legal and regulatory uncertainty over the use of copyrighted materials in AI tools.

“Our message… was that AI will bring the biggest revolution the creative sector has seen,” CISAC President (and Abba co-founder) Björn Ulvaeus wrote in a foreword to the report.

“To prepare, we must act now. We should not sit on our hands waiting to see how things evolve. We cannot let tech companies and policy makers sit at the decision-making tables while the creators are left outside the room.”

CISAC’s report called artificial intelligence “our top priority in 2024,” and reiterated a three-pronged approach that the organization unveiled in an open letter to governments last year:

  • Authorization: “Creators must have the right to license the use of their works by AI tools.”
  • Remuneration: “Creators must be paid for such uses.”
  • Transparency: “AI providers must be obliged to inform on the training of copyrighted works.”

CISAC represents 225 collective management organizations (CMOs), performance rights organizations (PROs) and other copyright and collection societies around the world, among them AMRA and ASCAP in the US, PRS for Music in the UK, GEMA in Germany and SACEM in France.

Collectively, these groups represent more than 5 million creators working in music, audiovisual content, literature, visual arts and drama.

“We cannot let tech companies and policy makers sit at the decision-making tables while the creators are left outside the room.”

Björn Ulvaeus, CISAC

In this year’s report, CISAC stressed its involvement in the development of the European Union’s AI Act, the democratic world’s first comprehensive legislation regulating the development and use of AI.

The organization highlighted its success in ensuring that the AI Act includes measures on transparency, specifically, its requirement that AI developers keep records of, and make public, the content they used to train their AI models.

That’s one key ask from the music industry, which sees transparency in AI development as necessary to be able to track what intellectual property AI developers used to train their algorithms.

The AI Act also includes a requirement that tech companies seek permission from rightsholders to use copyrighted IP in training their AI models. However, the laws leaves open certain carve-outs that make it unclear what types of AI tech are covered by this requirement.

“I think copyright and creators’ interests are now higher on the agenda of governments than before, but there is still a huge amount of education and advocacy to do,” CISAC Director General Gadi Oron said in a Q&A in the annual report.

CISAC also filed a submission to the US Copyright Office (USCO) last year, after the government agency issued a call-out for input on its policies regarding copyright and AI.

Numerous music companies and industry groups, such as Universal Music Group and the National Music Publishers’ Association (NMPA) filed submissions to the USCO, calling for rules that would require AI developers to seek authorization, and pay, for the use of copyrighted materials.

Tech companies and tech investors such as Andreessen Horowitz argued that training AI on copyrighted materials should fall under the “fair use” exemption to copyright law, and that requiring AI developers to pay to use copyrighted IP would hobble the industry.

“Copyright and creators’ interests are now higher on the agenda of governments than before, but there is still a huge amount of education and advocacy to do.”

Gadi Oron, CISAC

CISAC said over the past year it has been supporting Japan’s Society for Rights of Authors, Composers and Publishers (JASRAC) in its struggle to change the Japanese government’s policies on AI.

Japan last year deemed that AI developers can use copyrighted content without remuneration for the purpose of building AI models, as it falls under the law’s exemption for text and data mining. In its report, CISAC said this policy “has been assessed as having a harmful impact on creators.”

The organization also said it’s working on licensing and remuneration schemes for AI development, which have been “the subject of preliminary discussions in different CISAC committees. It will be an urgent priority for CISAC and its membership in 2024.”

“AI can be a wonderful tool, but this must never be at the expense of creators’ rights,” Ulvaeus wrote in the report. “The concept of copyright has had and has immense impact on culture and economy and must not be watered down by AI.”

Digital is the top source of creators’ incomes

In its most recent collections report, released last October, CISAC said music collections – the largest source of revenue among its members – grew a record 28% YoY in 2022, to EUR €10.8 billion, marking the first time global music collections have crossed the €10 billion mark.

It was also the first year that digital IP was the largest source of revenue for creators worldwide, driven by the growth of digital streaming services and new or renewed licensing deals by collection societies.

“However, many CISAC members continue to highlight that the vast majority of creators they represent are not experiencing increased digital royalties and that their works remain widely undervalued in the market,” the new CISAC report noted.

“Overall collections are hitting record levels, which is indeed encouraging for the future. Nonetheless, we must relentlessly prepare for the unprecedented challenges ahead – and, above all… for the implications of generative AI,” Marcelo Castello Branco, Chair of the CISAC Board, wrote in a preamble to the report.

“In this new era that is starting for the digital environment, it has never been more important that human artistry is legally protected and assured.”

China’s digital music market a problem area

CISAC has identified the Chinese digital music market as a problem area when it comes to licensing of music to streaming services.

While digital collections in China doubled between 2017 and 2023 – from €27.6 million to €54.5 million – the report noted that revenue growth stalled in 2023, “as digital income fell sharply due to the lack of licensing agreements with major DSPs including Tencent and NetEase.”

The Music Copyright Society of China (MCSC) has been pressuring Tencent Music Entertainment and NetEase Cloud Music, the two dominant operators of music streaming services in China, for new licenses, which haven’t been renewed since 2021, CISAC said.

In recent years, both Tencent and NetEase have focused beyond licensing of music content for revenue growth. Both companies have built in-house musicians’ platforms that have contributed millions of tracks to their streaming services’ libraries.

Tencent, in particular, has been focused on developing AI-driven music-making tools for its musicians, and applying AI to the listener experience. In its most recent earnings call, the company said it’s focused on developing its own IP, and expanding its live music offerings.

Controversial copyright bill in South Africa

CISAC’s report says the organization has been supporting South Africa’s CMOs in a campaign of opposition to proposed new copyright reforms.

The report says the bill suffers from “an excessive focus on exceptions opening up many new uses for which creators will no longer have the right to earn royalties,” a “clumsy” fair use exception “that will lead to uncertainty burdensome litigation.”

The organization also says the bill is inconsistent with “international best practice in copyright law.”

“If adopted, the Bill will harm South Africa’s creative community, devalue creators’ works and be out of step with international best practice,” CISAC’s Gadi Oron said in February.

The bill has been approved by the country’s National Assembly and the National Council of Provinces, but has not been signed by President Cyril Ramaphosa, who once before sent the bill back to parliament for reconsideration.

The bill creates exemptions to copyright law to allow copyright-free transcription of materials for use by disabled people, for instance by allowing a book to be translated into braille. It also allows libraries to digitize, format-shift and share copyrighted resources.

Supporters of the bill – the first reform of the country’s copyright laws in 50 years – say many of these elements are necessary for South African copyright law to conform with constitutional requirements.

They argue that some of the widespread loss of materials in fires at the University of Cape Town and Parliament could have been avoided if libraries had been able to digitize their collections without incurring large costs.

“The democratization of information and education are important objectives, but they should not come at the expense of South Africa’s poets, composers, culture and creativity,” Oron said earlier this year.

CISAC’s annual report was issued ahead of its Annual General Meeting, scheduled to take place this year in Seoul, South Korea, on May 30.Music Business Worldwide

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