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Thursday, February 22, 2024

Contained in the Music Business’s Excessive-Stakes A.I. Experiments Specific Occasions

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Sir Lucian Grainge, the chairman and C.E.O. of Common Music Group, the most important music firm on this planet, is curious, empathetic, and, if not precisely humble, a grasp of the humblebrag. His superpower is his humanity. A sixty-three-year-old Englishman, who was knighted in 2016 for his contributions to the music {industry} and has topped Billboard’s Energy 100 record of music-industry gamers a number of instances previously decade, Grainge is compact and a bit chubby, with alert eyes behind owlish glasses. He isn’t making an attempt to be seen. He presides over a public firm value greater than fifty billion {dollars}, however he may very well be a small-business proprietor who sells music in a London store, as did his father, Cecil. On earnings calls, Grainge can sound extra like a London taxi dispatcher than a chief government. However woe to those that mistake his European civility for a scarcity of aggressive hearth. “He’s so misleading with that little variety face and people little glasses,” Doug Morris, the earlier chairman of UMG, informed the Monetary Occasions in 2003, when he was nonetheless Grainge’s boss. “Behind them, he’s truly a killer shark.” In 2011, Grainge devoured Morris’s job.

As UMG’s chief, he has solidified the dominance of Common, the most important of the Large Three label teams, serving to it to overhaul Warner Music and Sony. Greater than half of Spotify’s twenty most streamed artists of all time are signed to UMG. However Grainge can also be the consummate music man, with forty-five years of expertise on each the publishing and the label sides of the enterprise. He oversees a protracted record of previously impartial labels, together with Interscope, Republic, Capitol, Motown, and Island. “Lucian’s just like the league commissioner,” Monte Lipman, who based Republic along with his brother Avery, informed me. Don Was, the top of Blue Observe, UMG’s storied jazz label, stated, “He’s the neatest motherfucker within the music enterprise, interval. He can function within the inventive world, and he can function within the monetary world, that are two very totally different beasts.”

Grainge lives and works in Los Angeles, however West Coast health tradition has but to make a convert of him. He neither skis nor golfs, though he generally drives the cart for different golfers, doing enterprise between holes. He doesn’t drink or smoke, and, as for medication, “I panic when I’ve to take an aspirin,” he has stated. He’s a household man whose first spouse, Samantha Berg, suffered issues whereas giving start to their son, Elliot, in 1993, and spent the remaining years of her life in a coma—a profound loss that has coloured his world view as a lot as any skilled expertise. In March, 2020, Grainge was among the many first wave of individuals in L.A. to contract COVID, and he practically died, spending eighteen days on a ventilator. After recovering, he informed me in his workplace final November, he had survivor’s guilt. “Why me?” he stored asking himself.

Grainge’s son, Elliot, now thirty and a document man himself (his label, 10K Tasks, signed the Gen Z sensation Ice Spice), informed me, “We’re not from Hollywood.” He added, of his father, “He doesn’t placed on a present, a façade, like so many individuals out right here do—there’s a complete distinction of character. He’s from an insular Jewish group in North London. He has a village mentality.”

Nonetheless, music has made Grainge a really wealthy villager. One British music government informed me, “Profitable means extra to him than to nearly anybody else I’ve met within the music enterprise”; cash is only a manner of maintaining rating. Though Grainge’s annual wage—5 million {dollars}—is comparatively modest for his place, he acquired a hundred-and-fifty-million-dollar bonus for efficiently taking UMG public, in 2021. Some shareholders objected to the dimensions of this “transition” compensation, deeming it “extreme.” Within the U.Ok., Grainge’s pay package deal was even mentioned in Parliament, within the context of a proposed invoice that was selling fairness within the music enterprise. A Conservative M.P., Esther McVey, stated, “It’s stunning that record-label homeowners are incomes extra out of artists’ works than the artists themselves.”

Grainge lives in a mansion in Pacific Palisades along with his second spouse, Caroline, whom he married in 2002, and with whom he has raised a daughter, Alice, and a stepdaughter, Betsy. When he obtained a star on the Hollywood Stroll of Fame, in 2020, Lionel Richie—a longtime Common artist, and the daddy of Elliot’s spouse, Sofia—honored him on the ceremony. (“That’s an actual copyright!” Grainge exclaimed to me approvingly about Richie’s evergreen tune “Howdy.” “A marriage and bar-mitzvah music!”) He’s extremely regarded each by UMG’s artists and by the corporate’s traders, a very tough twofer to tug off.

His previous good friend Bono, whose band, U2, is on Island, informed me, “Lucian doesn’t do varnish. Should you’re in search of varnish from Lucian, you’d higher be ingesting it. He’s precisely as he seems.” He added, “Individuals like us are practiced within the artwork of dizziness, and the music enterprise is usually a dizzy world. However for these of us who wish to know the place the doorways, partitions, and home windows are, info are pleasant, and so they’re extra pleasant in the event that they don’t include the sort of back-slapping, white-crowned varnish”—the type with which music executives typically deal with artists. Bono did an impression of Grainge for me. “Can’t do it, mate!’’ he barked. “No! Won’t. Not gonna occur!” He added that, as a musician, “I really feel very snug after I know who I’m within the room with, after I don’t have to barter with a Janus-faced man.”

Which isn’t to say that Grainge is all the time simple to grasp. He favors off-the-wall analogies, typically involving vehicles, which he collects. When Grainge first met the English singer-songwriter Jamie Cullum, he declared, “Jamie! You’re like a System 1 sausage roll,” an change that has been captured for posterity in a cartoon Cullum drew that hangs on a wall outdoors Grainge’s workplace. “He talks in riddles, which I discover endearing,” Jody Gerson, who runs UMG’s world publishing firm, informed me. “Bizarre historic British references, Yiddish issues, and every so often he’ll say, ‘Are you aware what I imply?’ And I’m, like, Do I admit that I don’t? He as soon as stated to me, ‘Jody, I believe like a jazz musician. I don’t all the time know precisely how I’m getting there, however I do know the place I’m going to finish up.’ Lucian is aware of what he’s doing always, and that’s his course of.”

Amongst traders, Grainge is seen as an government whose strategic use of know-how has reshaped the {industry}’s enterprise mannequin. At an investor presentation in 2021, Invoice Ackman, whose hedge fund, Pershing Sq. Capital Administration, owns ten per cent of UMG, in contrast Grainge’s affect on the music enterprise to that of Netflix’s Reed Hastings on the TV and movie {industry}; he has additionally likened Grainge to Walt Disney and Steve Jobs. Irving Azoff, of Full Cease Administration, informed me that Grainge, who attracted Ackman’s fund and the Chinese language tech conglomerate Tencent, which owns twenty per cent of UMG, had created a worldwide investor base to match the corporate’s roster of world superstars. That, in flip, had enhanced the worth of the music {industry} as an entire, “which had all the time been historically undervalued,” Azoff stated.

In the middle of Grainge’s forty-five years within the enterprise, every part about the best way individuals create, promote, and eat music has modified. Distribution, as soon as a mainstay—you wanted labels to bodily get information into shops—has change into as simple as hitting an Add button. Promotion of latest music, which labels as soon as managed by means of radio d.j.s, now happens on streaming platforms, the place algorithms decide playlists. Product lives within the cloud, and revenues, previously derived from gross sales of albums and singles, have given strategy to common royalty payouts from streaming companies. Music executives, who used to return up within the document enterprise, like Grainge and Rob Stringer, the top of Sony Music, at the moment are as more likely to be attorneys, private-equity managers, turnaround specialists, or tech leaders—corresponding to Robert Kyncl, the not too long ago appointed C.E.O. of Warner Music Group, who was beforehand an government at YouTube.

And but, not like print media, tv, and movie—different inventive industries which have struggled to adapt to related digital transformations—the music {industry}, after a extreme contraction within the first decade of the century, now seems to be extra worthwhile than ever. Streaming revenues alone reportedly surpassed seventeen billion {dollars} in 2022. It was arguably Grainge who, greater than every other government, defied the grim prognostications of the {industry}’s imminent demise within the early two-thousands. How did he handle it? In any case, though UMG controls the content material, Google, Apple, Microsoft, Meta, et al. personal the know-how.

“Let it out. Let all of it out.”

Cartoon by Benjamin Schwartz

“It’s referred to as a ‘wriggle,’ ” Grainge, in his massive sixth-floor nook workplace, informed me on a grey November day. He sat at an rectangular desk along with his again to the window, which faces east towards downtown Santa Monica. A guitar signed by Amy Winehouse was close by. He held out his hand and wriggled it, his fingers shifting like fish nosing by way of coral. “You’re going to have to determine for those who’re going to go above, beneath, across the aspect, or by way of.”

In March, 2023, Neal Mohan, who had simply change into the C.E.O. of YouTube, acquired a message from Grainge that stated, “Hey Neal, congratulations, when can we meet?” Mohan informed me, “It was typical Lucian in that it was heat and pleasant, nevertheless it was clear that he had actual urgency in his request to speak.” The topic was A.I.

A. & R. scouts are stated to have ears, and Grainge sports activities a powerful pair of aural appendages that transfer up and down the perimeters of his head when he’s speaking. However Grainge makes use of his nostril. “I’ve all the time been capable of scent intuitively what the following scene is,” he stated. “Whether or not it’s punk or New Romantics, I’ve all the time loved it, picked up on it, and that is my view of know-how.” Generative A.I., which may produce novel photos, textual content, and music, smelled to him like the following huge scene. “That’s all I’m—a expertise scout.”

The {industry} is dealing with one more revolution, however what type isn’t but clear. Is A.I. a format change in the best way music is consumed, just like the transition from information and cassettes to CDs, or is it a risk to the enterprise mannequin, as had been free downloading and file-sharing? Is generative A.I. a brand new sort of digital workstation for making music, or is it the brand new radio—a platform for selling acts and fascinating with followers? Is a brand new period of musical invention at hand, or will A.I. cripple human creativity?

In April of 2023, an nameless producer referred to as ghostwriter used A.I. voice replications of Drake and the Weeknd to create a deepfake duet referred to as “Coronary heart on My Sleeve.” The “Faux Drake” music shortly went viral, sending waves of concern by way of the {industry}; Common’s inventory fell by roughly twenty per cent between February and mid-Might, over issues about generative A.I. eroding the worth of its copyrights. (The inventory has since recovered, and is close to an all-time excessive.) Grainge invited me to think about an illegitimate model of a Kanye West music that includes Taylor Swift’s voice: “Get your head round that. After which it’s ingested into one of many platforms and somebody begins monetizing it.” He added, “I haven’t spent forty-five years within the {industry} simply to have or not it’s a free-for-all the place something goes. Not going to occur whereas I’m nonetheless right here!” On the identical time, he didn’t need to miss out, in case A.I.-generated materials grew to become a brand new income for artists—and their labels.

Earlier than Mohan’s appointment, YouTube, which is owned by Google, had developed a number of key music-related merchandise: paid-subscription companies and Content material ID, an automatic strategy to detect copyrighted music on the platform. These merchandise dramatically altered YouTube’s relationship with the music {industry}, turning the lawless wasteland of the early twenty-first century into the {industry}’s Elysian Fields. Between July, 2021, and June, 2022, YouTube paid greater than six billion {dollars} to rights holders globally.

Final spring, Grainge flew to San Bruno, south of San Francisco, the place YouTube is predicated. This was across the time that individuals in practically each content material {industry} had been awakening to the truth that Google, Microsoft, Meta, and OpenAI had been scraping materials of every kind from the Web to make use of in coaching their A.I. fashions. As attorneys in all these content material companies mulled suing for copyright infringement, Grainge’s intuition was to play with the know-how. It was the identical strategy he had taken to music streaming. “He experiments early,” Daniel Ek, a founding father of Spotify, informed me. “So then the price isn’t as big later, since you’re not betting the farm on every part you’re making an attempt to do.”

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