Okay, hear me out...
Bill Ackman put in a $64 million dollar bid to buy UMG. UMG responded by declining and signalling that they think their being undervalued and opted to buy back their own stock.
The major labels in the music space have been decreasing in value since the advent of AI music generation platforms, but they've also moved from litigation with these generation platforms into partnerships. This will potentially increase their bottom line revenue as more people utilize these generation platforms.
WMG seems to be the outlier that is most bullish on AI partnerships with their newest acquisition of Sureel AI; a patented attribution platform that tracks exactly how artists' creative work is used inside AI models and ensures rightsholders get paid for that influence. A potentially historic move for how creators could become compensated for their music that was utilized in training data (not here to debate the ethics of their non consent to be a part of the training data in the first place; that's pretty black and white). They were also the first to partner with Suno and Udio who are the leaders in the gen AI space.
To build off that, while everyone is upset about the tidal wave of AI slop music (me being one of them), WMG CEO Robert Kyncl has said on record that it undeniably increases the value of real artists and non AI music. This potentially insinuates that their existing catalog of music, which was already pretty valuable, could potentially become even more valuable by unknown multiples.
The future of AI in the music industry is murky, but it's undeniable that it probably won't go away. If anything, it follows the historical precendence of all technological advancements in the music industry where it lowers the barrier of entry for a person to create music. Like from recording on tape to utilizing digital audio workstations; every techonological leap forward is met with resistance but eventually becomes embraced and then becomes standard practice.
What do you guys think?
