How am I going to start this video off? U-M-G is suing DistroKid! That's an intro right there.

Hi everyone, Anthony Fantano here, internet's busiest music nerd. I hope you're well. It's been a minute since we've talked about the storied topic of AI, or AI music, on this channel.

And this new, weird lawsuit I just saw come down, filed by none other than Universal Music Group, I think is providing the opportunity to dive into this topic once again, mostly because I find the motivations and reasoning behind this suit kind of confusing. Despite the fact that DistroKid is not a platform that itself generates AI music, that would be one of these sites, one of these interfaces, that UMG is actually in bed with now, doing backroom deals and settlements in hopes, maybe generating AI music they can profit off of from their own catalog at some point in the future, I'm sure.

But rather than taking the legal fight against AI music directly to a Suno or a Udio, UMG is turning around and suing DistroKid. In so many words, according to this suit, they are laying the blame on DistroKid for flooding the internet, flooding the musical pipelines, with AI slop that human artists can't keep up with.

Which, given how much we all hate AI slop, sounds all well and good, but is Universal really acting here out of some moral obligation, or is there something else afoot? Which is why I decided for this video to reach out to none other than Miss Krystle [Delgado] herself, the top music attorney, semi-regular on the channel, to pick her brain about what the nuts and bolts of this lawsuit are and what the heck is even motivating it.

Anthony: Okay, here we are having this discussion. And as I've said, I had to reach out to you. I need your legal mind on this, Krystle, because after doing multiple videos, maybe hours of content at this point, about the topic of AI music, I was aghast when I saw this lawsuit pop up. For years I've been wondering why the labels aren't being more aggressive, more protective of their copyrights, of the sanctity of the music that these artists are creating on their behalf.

And now we have this suit, and when you read the text, they're taking issue with the proliferation of AI music, how it's essentially out-competing human artists. But they're not laying this lawsuit at the feet of the companies making the AI music, they're laying it at the feet of DistroKid. What is going on here? From your perspective, does this lawsuit make sense, and what's the motivation for it?

Krystle Delgado: Well, look, are the labels in fact taking action in regard to all the AI stuff and the unauthorized use of their songs? Yes, they are. They've sued Suno and Udio and a bunch of others. But you raise a really good question: why is Universal, in this instance, suing DistroKid, a music distributor? Because it's arguably the passive intermediary. It's the middleman between someone who has music, whether it's human-made or AI, and how you get that music onto streaming platforms like Spotify. This isn't the first one, either. They actually went after TuneCore last year.

What I've been talking about is that I think this is Universal weaponizing their copyrights. They're saying, "We think the users on your platform are doing bad things, so we're going to sue you, and you need to pay the bill." We're going to talk about that. But what was interesting about this complaint is that all the headlines, the major labels, right, they're suing the distributors for all the AI slop, which is how you just brought this in. All the AI slop.

And I go, boy, so great that we have Universal coming in to save all the little artists, just like myself, I'm an independent artist, from the AI slop. But I'm a lawyer, and I actually read the complaint. After you get through the many, many pages where they talk about the AI slop over and over and over, you get to what the actual complaint is about. It's a copyright infringement complaint over the same stuff that they (UMG) sued TuneCore for. So what I'm saying it's not actually about the AI slop.

So it's a shell game, a bit of a distraction. They're making it seem like it comes from a principled perspective that everybody agrees with, because the term "AI slop" is very polarizing right now, and it's something your average person can get behind regardless of what perspective you're taking from it.

In my humble opinion, yes, I think this was a PR move, because that's the shiny title you can put over this. But it's the same thing they did when they sued TuneCore. If you're suing TuneCore in the amount, allegedly, of $500 million, well, we already know what happened in that case. TuneCore was quick to settle. So for all the lawsuits Universal has filed, where they're saying you infringed our songs, our copyrights, in some way, this kind of seems like a tactic to shake down those who have money.

And I don't know if you've experienced this, I'm sure you have, for all of the reactions you've done, the claims that you would get at the time, that you've played music on your channels, from the owners of the music. Over the last couple of years, we've seen a really aggressive effort from Universal in particular to go after YouTube creators and to claim the monetization on your videos. But there's a thing called fair use. If you're reacting to music, and educating your followers, being entertaining and doing your wonderful thing you always do, you're allowed to use those songs. That's the law. But what the labels have been doing is still filing the claims, and it basically becomes a game of chicken. Are you going to dispute? And I don't know if you have any experience to share with this. Are you going to dispute and have a fight with Universal on your YouTube channel? Are you going to try and see if you get a strike?

Oh, yeah. We always dispute every time. I mean, we try to avoid these headaches as much as humanly possible, but we always dispute, and have found in most cases it ends up in a somewhat amicable middle ground, maybe with a monetization split. But that's, at least right now, kind of beside the point.

If what you're saying is the case in terms of their motivation, that copyright infringement is really at the core of this suit, does it even still make sense to lay that at the feet of DistroKid or TuneCore legally, because they're operating more as a middleman in this instance? They're not making the AI music, and they don't even technically function as a label. At the end of the day, they're just the pipeline through which some people are able to monetize this stuff on Spotify or Apple Music or wherever. Do they really own the blame here?

Right. DistroKid is not the hero in this story, so I would be clear about this.

Yeah, we both have our issues with DistroKid. Not to paint them as the victim here, because we've both had our issues with them. But just to make it clear in terms of real culpability here.

Right. So here's the thing. DistroKid reported last year the millions and millions of songs and artists that are on their platform... They are the biggest distributor in the world. So it becomes a matter of whether what Universal is essentially arguing, that all songs that are uploaded, whether they're human-made or AI-made, it's DistroKid's responsibility to ensure zero infringement, ever. Nothing should ever get through, whether it's an augmented version, a sample, it wasn't cleared.

And we go, well, is that even reasonable? One of the things Universal cited in its complaint is that there's this we'll say, "artist," called Lo-Fi Chill, who in the last 12 months has uploaded over 4,000 songs. They're alleging, of course, that these are AI songs. And we go, does that mean Tina or Kim over in clearance is supposed to sit there and listen to every single song? No. So there's a reasonableness standard here. DistroKid isn't necessarily the good guy in this situation, but is this fair? Is this right? Or is this just a play for a major label to shake down a business that probably can pay? Because they're not going after YouTubers so much anymore. That's not even true, they are going after you guys still.

No, no. It's true. And at the end of the day, even if copyright truly is the core of this, and DistroKid is that pipeline, and certainly they bear some responsibility for posting copyrighted material that's being commercially used on these platforms, still, they're not the ones creating it. It's these AI platforms that these major labels are in bed with, that are creating it and that they're doing these backroom deals with. Should the labels not also be turning around and talking to them, like, "Hey, is there a way we can slow this down or rein this in, so it's not flowing freely all over the internet?"

And I presume on some level, outside of the copyright, a motivation behind doing this is because of the way the royalty pools on places like Spotify work, they have to see that the valeu of their streams are being diluted. It's not like you get an infinite amount of money per stream that comes in. There's a limited pool of money any label can have access to that's coming out of Spotify every year, and the more streams that happen overall, and I'm sure a lot of this AI stuff is bot-driven, of course you're seeing a watering down of the value of every other stream. So I'm guessing they're seeing the effect of that at least a little bit and want to nip it in the bud.

Oh, sure. And here's the thing, I can say this because I have people who work on the inside of all of these companies, and they tell me how this works. DistroKid has filters in place to try to catch as much as they can, meaning the blatant theft, because they don't want to have to deal with someone trying to steal Ariana Grande's song. So they're going to have blocks and things in place to try to prevent this stuff. And should they? Absolutely.

You don't get to just sit there passively and say, "Oh, yeah, we're not responsible if you use our platform and you're the naughty person." No, you get caught, you get sued. So they do have requirements they should have in place, and that's how they defend themselves in these cases. But more importantly, what should their responsibilities be? Because you just talked about things like royalties and the ethics, at a high level. That's why I've made such a stink on my channel about music distributors in general. My law office fights the fight every day against DistroKid and all these distributors, who will freeze accounts. They'll say, "You just got a claim from Universal on your Spotify song, so now we're just going to lock everything down." They put a lot of responsibility on the creators without investigating, without doing anything, without having a meaningful way for someone to get a hold of customer service. Am I making sense?

Yeah, no, it seems like that. I don't know, again, who's fully at fault here. But it seems like DistroKid has put themselves between a rock and a hard place. You can judge individually whether it's a fair place to be in, but for years there have been complaints about the customer service, about artists dealing with takedowns, even before the AI discourse was in full swing the way it is currently.

And it seems like with this copyright pressure and this lawsuit, there's even more question about the validity of any given song being uploaded in terms of the source material. As a result of that, and historically, their not being the best on the customer service front, there's more music to potentially take down, more artists to potentially be dealing with, more revenue that's being diverted or misallocated. I'm sure you're seeing more of these cases all the time, just because of the confusion and the skirting of responsibilities to artists on their part.

Well, at a baseline, I just go, if you're dealing with millions of artists in DistroKid's case, or even if it was 10,000 because you're a smaller distributor, the thing that matters is that a music distributor is the middleman, not because someone wants to use their platform, but because they have to. Artists cannot get their music on streaming platforms without using one of these companies. So I think there should be, and has to be, a much bigger obligation on distributors to do right by artists and protect them. If that's the case, your obligation, unfortunately, goes up.

So that's the responsibility piece. But look, here's the truth. DistroKid is a business, and it is principally a subscription business. You sign up to distribute your songs, you pay your monthly fees, and they upsell you into different things. So the argument would be, are they going to slow down the AI songs, like the 4,000 that came from Lo-Fi Chill? Well, why would they? If the whole basis is subscription, they get paid more by allowing the flow of all of this. They're just starting to get dinged now. So I think if we see any kind of change, it's going to be in response to, let's say, a lawsuit by Universal in the hundreds of millions of dollars.

In terms of that ding, from your perspective, companies and individual actors respond all kinds of ways to these sorts of legal actions, sometimes to save their own skin, or sometimes to lessen whatever potential punishment there is, showing, "Look, we're already dealing with the problem a little bit. We actually care about this. We didn't wait for the decision to come down to start doing something." Have you, or has anybody you're connected to, been seeing differences in behavior, actions, or willingness to pipeline a lot of this AI slop onto the streaming platforms via DistroKid? Since this lawsuit has been filed, has there been any hesitance on the company's part to continue engaging in this behavior?

Yeah, well, I haven't seen any press release talking about this, if that's what you mean. But one of the downstream things we've been hearing and reporting on is that artists are saying that following the filing of this lawsuit, a bunch of new takedowns started occurring. Our concern is, and we don't know this to be the case, that if DistroKid is responding to the lawsuit and the allegations of all the AI slop by ripping down, maybe arbitrarily, I don't know, artists' songs, then a bunch of independent artists, who are the ones being the loudest about this, are having their music taken down.

And it's all the things I shared before. The music gets taken down, and there might even be some kind of flagging on it for streaming issue, whether it's streaming, botting, fraudulent plays, copyright infringement, all these things. That's where the point of responsibility really comes into play. If someone's had their stuff taken down incorrectly, what a nightmare. You need to talk to someone, you need to get help. That's what my firm does, and we're very effective because we're a law firm. We send a scary letter saying we're going to sue you if you don't fix this immediately. That's a little more powerful than sending a message to customer service, but it shouldn't have to be that way.

Yeah. I guess I'm just a little confused, because it seems like there should be the business motivation for at least one of these actors, be it the labels, the streaming platforms themselves, or the middleman, to put a stop to this in some way. It seems like everybody wants to signal, on some level, "We care about the AI slop problem, and we know it's bad and it's hurting everybody," and so on. But nobody's really putting the brakes on it. Spotify, I think, recently announced that, "Hey, we removed 50 million AI songs from the recommendation algorithm," which, like, sure, that's a step.

It did. And, Fantano, what I loved about that is it didn't say they actually removed and deleted 50 million from the platform.

Well, that's what I'm saying. You didn't remove the songs. You just removed them from recommendations.

But even then, the majority of AI songs don't get a lot of streams. So here's the thing. On the algorithmic recommendations, that's how it works. If something's not getting streamed, it's unpopular, and it doesn't get recommended. So for them to say, "Oh, we took it out of recommendations," it wasn't in there anyway. So, just saying.

Yeah, it may not be that big of a difference maker to begin with. But with that being said, you also have to think of the server space and the streams these songs are pulling in at the end of the day. Spotify is invested in by the major labels to some degree, so there's a shared profit motive there. Spotify understands that the more AI gets uploaded to their platform, the more it's diluting the value of everything else.

Why aren't they, either by direction of the labels or just to save their own butts, saying, "We're just going to delete the stuff," or "We're just cutting off the pipeline"? Anything algorithmically that we see coming in on the back end that has any kind of code or signifier that it's been made via this AI platform or that AI platform. That's how Deezer is able to separate it, and lots of other platforms are labeling the stuff. They have programs that can detect which platforms are making these songs from scratch, generating them, and uploading them. Why are they not cutting this stuff off at the pass and not allowing any of it?

Yeah, and I'll go even a step further on Spotify. In particular, two months ago, we reported that there was another big update from Spotify, the big hero coming in to finally put labels on the AI songs, which is what we've been asking for for about two years. And the announcement is that they had the labels, but what they did is they have AI persona labels. So basically, if you self-report that the profile picture on your Spotify account is made with AI, you can say that, and it will say "AI persona." And even if Spotify catches you and sees that you have an AI picture, it will likely do a persona label. Point being again, they didn't just add the label that says, "This song is AI." If they are going to host everything, consumers at a general level just want to know what they're listening to. So the request is to have an AI music label on the AI song. Spotify refuses to do this. It will do everything except that.

As much as I hate the idea of closing platforms that are accessible to everybody off in certain ways, because you and I grew up during a certain time on the internet where it was very Wild West and very free, and if you could find a platform that would have you, you could upload whatever you wanted, and the internet was this kind of place for open and free expression, there's a real competition problem at the end of the day, because humans just can't make as much music as these platforms can. Do you foresee any kind of legal precedent or argument that would be effective, coming at some point, where it's like, "We can only make so much of this or allow so much of this. We need to stop this in some way, or else we're basically going to drown the internet in this garbage and it will become unusable"?

Quantity control. I'm hearing you, and actually to your point, you said that at the time we grew up on the internet, I was a homeschooled kid. I grew up in the middle of the woods with no internet. So I had a different experience than you.

You weren't even allowed online.

I wasn't, and it was a Christian household. So I think we had different experiences.

But on the quantity control, isn't there an argument at some point that these platforms might run out of space? I mean, honestly, Deezer is saying, what is it, 90,000 fully AI-generated songs are uploaded to its platform every day. So it's clearly more than 100,000 for Spotify. The flooding, the millions and millions that have accumulated in the last 18 months, it's wild. So the question is, what if the platforms limit how much they're willing to take? Will that make any difference? Well, no. But back to your original point, the royalty pool for each of these platforms is the same one that everyone pulls from, the ones with the AI music and the human creators. And so that's where this conversation comes up. If it hasn't already happened, at some point the AI songs are going to be much more than the human-made songs. That's just how it works. It's basic numbers. So yeah, it's going to eclipse at this point.

It's going to eclipse. It's got to already be there, or if not, well on its way.

Right. And so I think right now what I keep seeing with these music businesses is that they're just trying to react in the short term and ask, "How can we monetize as quickly as possible?" And let me tell you a theory I have for Universal. I think Universal is getting out of the business of being a record label. I think Universal is in the process, at least in part, of becoming an AI licensing company, because right now the best way to make money is to take all of the music you have and give it to an AI company for AI training. We've already seen this, obviously, Universal did the deal with Spotify, and it's doing the deal with Udio. They settled. So we're already seeing that happen, because Universal is not going to pay to develop artists the way it used to, the Mariah Careys, the Britney Spears types, to find talent, invest in it, and invest in the music's success.

Because what happened about six or seven years ago, which we all saw, is that they cut out that step a little bit and just focused on data. They said, "We just want to know what the hit songs are. We're going to find the hit songs and then go sign those songs. We're not going to sign the artists, we're just going to sign the songs, because there's market proof." So here we are, six or seven years later, and they're looking at the music business as a whole and asking, "Where are we going to invest money? Why invest in artists anymore? In fact, why even invest in music catalog acquisition? Let's just take the catalog we have, exploit the hell out of it, and give it to AI companies."

Knowing how AI technology functions at the moment, are they hoping, or do you foresee, that we're going to reach this kind of musical end of history, where they can just, from here forward, not even worry about developing or scouting new talent and allow AI to generate infinitely off of everything they own already? Or are they hoping that at some point this technology will advance so far that they can actually develop something new out of it? Because from my perspective, while a lot of the stuff that comes out of these platforms is passable, one of the tells is that it's often very derivative. Very little of it sounds fresh or sounds like it's risking anything new, because it's usually working off a very popular rubric that a human has already developed.

Great point.

Are they hoping they'll just be able to feed people nostalgia forever, or will they actually be developing new sounds and talent off of this process at some point?

Well, if you're Universal, what I can tell you is that they literally just cut the heads off of all of their A&R departments. They fired those people, or those people just left, a significant amount of the specific job of finding talent. Those are now gone. So in its restructuring, which is where this theory comes from, I go, have they completely stopped, and will they never sign a new artist? I don't know. I can't say that. But I know that what they're focusing on and what they're becoming now is something very different.

I'll also say this, because of the music catalog piece of this. Universal has been around since the 1930s, but in the last couple of decades they really focused on buying as much music catalog as possible. Buy the catalog, then use it, license it, stream it, do all the things. But they're actually running into a problem, because they are too big. If you get too big, and in the United States you reach a 50% threshold of the marketplace, you're now called a monopoly, or you have monopoly power, and if that's the case then the government comes in and breaks you up. So Universal actually has a problem right now where they can't just keep purchasing catalog. They have to figure out what to do with the current catalog. What we've seen them do is they now purchase businesses within businesses within the music business, the infrastructure. They just purchased CD Baby, which is a music distributor. So it's wild to see the restructuring.

Back to DistroKid, I think part of the business plan is to go after businesses that have deep pockets, come up with some creative lawyering and loopholes, and say, "You know what, you could be responsible." Sometimes the claim is just too high a hill to climb for the other side. That's why we see settlements often, and we already saw this happen with TuneCore.

And we've had discussions about DistroKid in the past, I believe, where you brought up the idea, like you just said with CD Baby, that there's potentially interest from some of these labels in owning DistroKid or that pipeline as well. Not just being the label, but the middleman too. Could this suit potentially be something that greases the wheels for such a thing, and puts DistroKid in a position where they're like, "Well, we want to try to sell this off or move this under the umbrella of somebody else to protect ourselves from exactly this kind of thing"?

I like how sinister you're getting with it.

Look, this whole industry is a disgusting mess. So I'm usually coming at most music industry business conversations cynically.

So if we go down that train of thought, Universal is technically going after its competitors, right? If it just bought CD Baby, and it already has, that was the Downtown deal, a $775 million purchase. It was a conglomerate of all these businesses, which included CD Baby. So, yeah, it's hard not to think that they're not only going to make money from these lawsuits, but they can take their competitors down a peg.

One of the last things I'll ask, because you did bring it up at the start of the conversation, and it's very relevant to how this is going to play out: the TuneCore suit and settlement that happened. From your knowledge, how much of that is going to inform the direction this goes in? Is DistroKid potentially looking at that and thinking, "Well, we're going to have to fold here because of the way that played out," or do they think they have an opportunity here to divert it in a different direction?

Yeah, look, some of the things complained of in the complaints included stuff like, after Universal had allegedly filed takedowns for DistroKid, DistroKid failed to remedy the situations. That's a different thing. You have an obligation as a platform once you've been notified. This is under the copyright act, under the DMCA. So if they did those things, if there actually is exposure they need to contend with and settle, that's for their lawyers to figure out. But how does the TuneCore settlement influence it? Well, it's a lot weaker than if there's actually a ruling. If there's a ruling and, let's say, TuneCore is found liable and has to pay a judgment, that's when lawyers can use that. They go, "Well, it happened in this case, now we're going to use it against you here." For a settlement, we don't know what the terms are. But, is DistroKid in a real sticky spot right now? It is.

When we were looking at all the takedowns artists were reporting, including on the videos I've done on my channel about this, there were just so many comments: "This happened to me. This happened to me. And also, by the way, my YouTube royalties are being withheld by DistroKid as well." DistroKid's not in the best position. That's often why these things settle, because it's usually not so cut and dry. And in this case, we don't really have any good guys.

Yes. Everyone is awful. Except us and except the artists.

We have to end this on a positive note for all the creators who are watching this, we cannot end on just this note.

Okay. So here's what I say. Well, the artists are good and we're good, but the labels and the distributors are Satan.

Then it goes, well, who should I use and what should I do? At the end of the day, what you have to do is always build up your audience. Have your email list, have your social media. When something goes awry with one of your service providers, like a music distributor, you have to have a strong enough relationship with your actual community that they will come to you. They will come to your website. They will buy your song through a PayPal link. So that's my takeaway. You are very much in control, and these third parties are ruining it for everybody else. We're watching, we're observing, we're reporting, but it doesn't change what you do today. So do something today.

Yeah. Never, never, never rely simply on one platform or revenue stream, especially when it comes to music. Always have another place or spot where you can reach your audience or get your music pushed through.

Yeah, a website. I still do it for the music that I put out. Always, before you put your stuff on Spotify, which is not going to make you a lot of money for the average creator, you put it on your website and you set a minimum, a dollar for your song or whatever you want to say, and then allow someone to pay whatever they want above that, because there are people who really support you. Even if it's 50 people, there are 50 people who support you. And then beyond that, it just grows. It's one of the most powerful ways I've seen for the tiniest creators, and for the big independent creators, who will make a lot of money because they give the real fans an opportunity to support them.

The top music attorney herself. Thank you for coming by and talking to me.

Thank you.