<\/p>\n
Suno, one of the AI music generation platforms facing legal battles with copyright holders, announced<\/a> last Wednesday (November 19) that it had raised $250 million in a Series C funding round that valued the company at a jaw-dropping $2.45 billion.<\/p>\n The lead investor was Menlo Ventures<\/strong>, a long-running venture capital fund that helped fund numerous known tech brands like Roku<\/strong> and Hotmail<\/strong> (before it was acquired by Microsoft<\/strong>), and more recently turned its focus on AI companies like Anthropic<\/a><\/strong>.<\/p>\n But another, less-mentioned, investor could be of more interest to the music business \u2013 because of what its involvement means for the music industry\u2019s relationship with AI.<\/p>\n That investor is Hallwood Media<\/strong>, the music company founded in 2020 by Neil Jacobson<\/strong>, the former President of Universal Music Group<\/a><\/strong>\u2019s Geffen Records<\/strong>.<\/p>\n In an Instagram<\/a> post published over<\/a> the weekend, Danny Jacobson, Hallwood\u2019s Head of A&R,<\/a> wrote: \u201cMeet Hallwood Media Ventures (HMV<\/a>). And if you\u2019re not familiar with SUNO, please meet one of the most important companies in music (and the fastest growing tool\/workstation for Songwriters, Producers and Artists). We\u2019re proud to have participated through their recent Series C round.\u201d<\/p>\n In addition to Managing Partners Todd Lowen and Neil Jacobson, Hallwood Media Ventures<\/strong>, the company\u2019s investment arm, is led by a few other UMG alumni, including Universal\u2019s ex-CFO Chuck Ciongoli<\/strong> and ex-EVP Mike Biggane<\/strong>, who also served as Spotify<\/a><\/strong>\u2019s Head of Global Curation.<\/p>\n Another team member listed on Hallwood Media Ventures\u2019 website<\/a>, who\u2019ll be familiar to many in the music industry, is Paul Hourican<\/strong>, formerly Global Head of Music Operations at TikTok.<\/span><\/p>\n Simply put, Hallwood is staffed by some very well-connected music insiders \u2013 and the company is all in on AI-generated music. Earlier this year, it established itself as a trailblazer in the legitimization of AI music within the industry when it signed Imoliver<\/strong> to a record contract.<\/p>\n Why is that a big deal? Because Imoliver isn\u2019t an artist \u2013 or at least not the way most people would think of a music artist. He is the most-streamed \u201cmusic designer\u201d (to use Hallwood\u2019s term) on Suno\u2019s AI platform, who\u00a0 \u201cuses the AI-powered platform to develop his lush sonic landscapes.\u201d<\/p>\n \u201cIt\u2019s a sign the industry is ready to embrace new ideas and new ways of creating,\u201d Imoliver said<\/a>. \u201cThis isn\u2019t about replacing artists, it\u2019s about expanding what\u2019s possible.\u201d<\/p>\n Perhaps more alarming to traditional artists is what Neil Jacobson had to say about the deal.<\/p>\n \u201cImoliver represents the future of our medium,\u201d Jacobson declared.<\/p>\n \u201cImoliver represents the future of our medium.\u201d<\/p>\n Neil Jacobson, Hallwood Media<\/span><\/p>\n<\/blockquote>\n Those who fear AI is a threat to the music industry can take some heart in the fact that Imoliver\u00a0 \u2013 now a verified artist on Spotify<\/a> \u2013 has so far struggled to wow audiences in the broader music world like he did on Suno\u2019s platform.<\/p>\n His label debut single, Stone<\/em>, has clocked around 13,500<\/strong> plays in the month it\u2019s been out \u2013 far short of the 3 million-plus<\/strong> plays it clocked on the Suno platform.<\/p>\n But another Hallwood-signed act, the AI-generated Xania Monet<\/strong>, recently became the first \u201cAI-powered artist\u201d to chart<\/a> on one of Billboard<\/a><\/em>\u2019s airplay charts.<\/p>\n Both the Xania Monet avatar and her music are AI inventions, the work of Telisha \u201cNikki\u201d Jones<\/strong>, who fed a poem she wrote into \u2013 you guessed it \u2013 Suno, and out came How Was I Supposed To Know?<\/em>, which went viral on TikTok before it hit No. 1 on Billboard<\/em>\u2019s Digital Song Sales chart. It even reached No. 20 on the Hot R&B Songs chart, though it fell out of that chart in its second week.<\/p>\n Xania Monet now has 1.4 million<\/strong> monthly listeners in Spotify<\/a>, where How Was I Supposed To Know?<\/em> has cracked 7 million<\/strong> streams.<\/p>\n In an interview<\/a> with the Wall Street Journal<\/em>, Jones explained that she used Suno to put her poem to music because her singing voice, in her estimation, isn\u2019t up to the task.<\/p>\n \u201cI grew up singing in church, but I can\u2019t do vocals as powerful as what I created with Xania,\u201d she said.<\/p>\n On the back of her chart success, Jones scored a reported<\/a> multi-million-dollar<\/strong> record deal. Who with?<\/p>\n Hallwood Media.<\/p>\n The reaction from some corners of music and media was swift and unequivocal.<\/p>\n In a post on TikTok, singer Kehlani<\/strong> declared<\/a> that \u201cno one will ever be able to justify AI to me\u2026 I\u2019m sorry, I don\u2019t respect it.\u201d The Guardian<\/em>, meanwhile, described<\/a> Xania Monet as \u201cthe latest digital nightmare to emerge from a hellscape of AI content production.\u201d<\/p>\n There\u2019s also the fact that Suno is facing multiple copyright<\/a> infringement<\/a> lawsuits<\/a> over its alleged use of copyrighted music to train its AI models.<\/p>\n If the copyright holders are right about that (and they almost certainly are, given that Suno has pretty much admitted<\/a> to using copyrighted music without authorization), then these Hallwood-signed artists have created music using a technology that ripped off other artists, without credit, permission, or payment.<\/p>\n Meanwhile, AI music is beginning to break into the wider music scene.<\/p>\n As MBW<\/em> reported earlier this year<\/a>, some AI \u201cartists\u201d are generating big numbers on streaming services. Country act Aventhis<\/strong>, with songs created by Suno and Riffusion<\/strong><\/a>, has around 1.3 million<\/strong> listeners on Spotify, while The Devil Inside<\/strong> has around 250,000<\/strong> \u2013 down from 700,000 earlier this year.<\/p>\n And there are plenty of others. In an article published at the end of last month, Billboard<\/em> counted<\/a> six AI artists to have broken onto its charts in the just prior few months.<\/p>\n But the question remains: How large is the market for AI music? Hallwood is clearly betting that it\u2019s large enough to justify seven-figure record deals \u2013 and an investment in a legally questionable business model.<\/p>\n Yet on a recent earnings call, UMG Executive Vice-President and Chief Digital Officer Michael Nash<\/a><\/strong> said<\/a> the company\u2019s research showed a limited appetite for AI-generated artists among listeners.<\/p>\n \u201cThe readout was 50%<\/strong> of music consumers are very interested in AI in relationship to the music,\u201d Nash said.<\/p>\n \u201cBut that\u2019s in relationship to their music experience<\/em>. The thing that ranks the lowest is artist simulation, what we would call \u2018fake artists\u2019. And you\u2019re seeing there\u2019s a lack of traction around that other than the occasional novelty phenomenon that may capture some headlines.<\/p>\n \u201cThat\u2019s not what fans are interested in.\u201d<\/p>\n \u201cYou\u2019re seeing there\u2019s a lack of traction around [AI artists] other than the occasional novelty phenomenon that may capture some headlines. That\u2019s not what fans are interested in.\u201d<\/p>\n Michael Nash, Universal Music Group<\/span><\/p>\n<\/blockquote>\n It may turn out to be that AI-generated artists are just a \u201cnovelty phenomenon,\u201d but one thing that appears to be here to stay is the licensing of AI music generators.<\/p>\n In recent weeks, Udio settled its copyright lawsuits with both UMG<\/a> and Warner Music Group<\/a>, with both companies striking licensing deals with the AI company for a platform set to launch in 2026. Udio\u2019s UMG announcement mentioned that Udio will become a \u201cwalled garden,\u201d with its music shareable only on the platform.<\/p>\n Given the recent investments and signings by Hallwood, it seems Suno isn\u2019t headed in the same direction.<\/p>\n From one perspective, the recent licensing deals between major record companies and AI platforms are a sign that AI developers are growing up, and finally deciding to do things the legitimate way. But from another perspective, we are witnessing the legitimization of AI-generated music, and its induction into the music industry proper.<\/p>\n Concerns of human artists about AI aren\u2019t likely to go away anytime soon.Music Business Worldwide<\/span><\/p>\n<\/div>\n\n
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