On its first-quarter earnings call, music streaming service Spotify spoke in more detail about how the advancement of artificial intelligence will impact its business. On a positive note, the company has provided an update on user adoption of the new DJ AI feature, which provides personalized music selections provided by an AI-powered, real-time DJ audio. But other advances in AI have the potential to cause harm — including using AI to create music that reproduces the sounds of existing artists without their consent, leading to copyright concerns and more complications for streamers like him.
The latter case made headlines recently when a song that used AI to reproduce Drake and The Weeknd’s voices was uploaded to a number of streaming services, including Spotify, Apple Music, Tidal, YouTube and Deezer.
Spotify and others quickly took the tack, but faced criticism from publishers like Universal Music Group, which questioned which “side of history” stakeholders in the music ecosystem wanted to be on: the side of artists, fans, and human creative expression, or the side of deepfakes, fraud, and artist disenfranchisement. Who is entitled to their compensation? “
On its Q1 2023 investor call, Spotify was asked how it intends to tackle this type of problem going forward.
In response, Spotify CEO Daniel Ek described the issue as complex and fast-moving and did not appear to have a proposed solution at this time.
“First, let’s acknowledge that this is an incredibly fast-moving and evolving space. I don’t think that in my history with technology, I’ve ever seen anything move as fast as AI is currently evolving.”
Ek noted that Spotify had to balance two goals, including being a platform to allow innovation around creative works, and the other needing to protect existing creators and artists. He takes both roles very seriously, he said.
“We’re in constant dialogue with the industry about this stuff. And it’s important to mention that there’s everything from…fake tracks from artists falling into one’s bucket to…just increasing the use of AI to allow for expression, which probably falls into collections.” The easiest and most indulgent,” Ek continued.
“These are very complex issues that don’t have one straight answer… but we are in constant discussion with our partners, creators and artists and we want to strike a balance between allowing innovation and of course protecting artists,” he added.
When pushed later about the material impact AI developments could have on business, Eck admitted that advances in AI are “really wonderful and scary” and that there is a risk to the broader ecosystem.
He said, “I think the whole industry is trying to figure that out and trying to figure out (AI) training… I would definitely put that into the risk account because there’s a lot of uncertainty, I think, for the whole ecosystem.”
At the same time, Ek emphasized that the company is benefiting from the use of artificial intelligence in other areas.
For example, Spotify’s recently launched AI DJ feature is gaining traction.
The feature is still in its early days, only beginning to roll out to Spotify users ahead of its Stream On product launch event in March, during which the company also introduced 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 North American market and still in beta, AI DJ now reaches “millions” of active users each week, according to Spotify, accounting for more than 25% of users’ consumption on days they DJ. .
This is a strong draw for the still experimental new feature and also a positive indication of the usefulness of Spotify’s investment in AI technologies.
The CEO also talked about the potential of AI in helping people create music without having to understand how to use complex music production tools. He envisioned artists instructing the AI to make the song sound “a little more upbeat,” just by using a voice command, for example, or telling the AI to “add some conga into the mix.”
He noted, “This has the opportunity I think, to argue meaningfully with that creative journey that many artists take”.
Ek also felt it was important to stress the difference between something like an AI-powered feature like DJing and concerns about AI creating fake tracks.
“I think it’s important to separate DJ AI from the AI conversation. So AI DJ, per se – I think we’ve had nothing but positive feedback from across the industry. I think opposition to AI from the copyright industry or labels and media companies … It’s about really important topics and issues like name and similarity; what is an actual copyright? Who owns the right to something where you upload something and you call it Drake, which it really isn’t; and so on and so forth. Eck said:” These are legitimate concerns.”
And those are obviously things that we’re working on with our partners to try to establish a position where we both allow innovation, but at the same time, protect all of the creators that we have on our platform,” Ek said.
The company announced that its revenue for the first quarter rose 14% year-over-year to €3.04 billion and its advertising revenue rose 17% year-over-year to €329 million. Spotify hit a new milestone with the news that it reached 500 million users, but the share of premium subscribers dropped to 40% of paid listeners for free, with 210 million premium subscribers and 317 million subscribers on the ad-supported plan.