Universal Music Group (UMG) CEO Lucian Grainge has put the music industry on notice, pledging to fight generative AI copyright threats on every front — from the courtroom to new licensing frameworks — as the world's largest record label takes a leading role in shaping how AI interacts with artists' work.
Grainge Vows to Fight AI Piracy
Speaking to investors following UMG's second-quarter 2024 earnings report, Grainge reaffirmed the company's commitment to protecting artists and songwriters from the unchecked use of their work by AI systems.
"There is identification of some risks at the preliminary stage and protection is provided against them," Grainge said. "It's like having a stick when we continuously go the extra mile to push for better conditions for artists and open up novel opportunities for them and the creative and commercial industries."
UMG was among the first major labels to adopt AI tools collaboratively, partnering with YouTube and Deezer to develop artist-friendly royalty payment models. But Grainge made clear that unauthorized AI exploitation of music is a separate matter entirely — and UMG will not tolerate it.
Lawsuits Against AI Music Startups Suno and Udio
In June 2024, UMG — alongside Sony Music Entertainment and Warner Music Group — filed copyright infringement lawsuits in federal courts in New York and Massachusetts against AI music startups Suno and Udio.
"These cases are based on the mass infringement of copyrighted sound recordings, on which for many years no-one had requested permission to copy or otherwise exploit," Grainge told analysts.
The labels accused both companies of training their AI models on decades of copyrighted recordings without permission, seeking statutory damages of up to $150,000 per infringed sound recording.
Q2 2024 Earnings: Revenue Hits €2.93 Billion
UMG reported strong second-quarter 2024 financial results alongside the legal update. Overall revenue rose 8.7% year-on-year to €2.93 billion (approximately $3.18 billion), driven partly by Taylor Swift's The Tortured Poets Department and gains in publishing and merchandise.
Recorded music subscription and streaming revenue climbed 5.8% to €2.2 billion, though ad-supported streaming revenue fell 4.2% as platforms including Spotify and YouTube posted slower ad growth. EBITDA before exceptional items rose 10% to €649 million ($704 million).
CFO Boyd Muir acknowledged the inconsistency in ad-supported streaming performance, while Chief Digital Officer Michael Nash urged investors to evaluate the streaming business over a multi-year cycle rather than quarter by quarter.
Streaming Slowdown in Focus
Spotify reported 626 million monthly active users in the quarter — 14% growth year-on-year but 6 million below analyst forecasts. Grainge framed the overall streaming evolution as a multi-year market cycle, signaling that UMG is playing a long game on both the revenue and rights-protection fronts.
The dual focus — maximizing streaming revenue while aggressively litigating AI copyright violations — defines UMG's current strategy as generative AI reshapes the music industry landscape.
