AI is on a collision course with the music industry. Reservoir's Golnar Khosrowshahi thinks there’s a way through it

Royalty Rates

The music industry faces ongoing challenges with royalty rate structures, as Golnar Khosrowshahi explains. She highlights the cyclical nature of royalty rate negotiations, which occur every five years with the Department of Justice. Despite legal decisions, companies like Reservoir Media continue to push for better compensation for creators, as the current system has a finite term 1. Nilay Patel notes that platforms like Spotify are rumored to change their royalty models, potentially impacting smaller companies without specific deals 1.

We go to dispute royalty rates every five years... the legal system made a decision, but we're still going to continue that battle because that decision has a finite term around it.

--- Golnar Khosrowshahi

Khosrowshahi also discusses the importance of relationships with digital music distributors like Spotify and Apple to manage licensing deals efficiently. She emphasizes that while Reservoir Media hasn't developed its own technology, it invests in the best available tools to streamline operations and maximize catalog value 2.

   

Copyright Issues

Copyright disputes, especially involving AI, present significant challenges in the music industry. Nilay Patel and Golnar Khosrowshahi discuss the intersection of copyright law and AI, noting the tension between these two areas 3. Khosrowshahi explains that while Reservoir Media has a lateral organizational structure, it faces complex decisions regarding AI and copyright law, including potential legal battles with generative AI companies 4.

I don't think any of us are changing copyright law anytime soon... the people who would be leading that charge seem to be hesitant about going down that road.

--- Golnar Khosrowshahi

Patel highlights the restrictive nature of fair use in the music industry compared to other media, which complicates the creation of new works. This environment has led to a trend where new songs are often built on old ones to avoid copyright lawsuits, a situation that Khosrowshahi believes needs addressing 4.