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AI is on a collision course with music — Reservoir’s Golnar Khosrowshahi thinks there’s a way through

The publisher behind the songwriting copyrights to some of the most popular music ever recorded doesn’t think AI spells doom for the industry.

Today, I’m talking with Golnar Khosrowshahi, the founder and CEO of Reservoir Media, a newer record label that I think looks a lot like the future of the music industry.

You might not have heard of Reservoir, but you’ve definitely heard of the artists it works with. Everyone from A-ha and John Denver to Evanescence to Joni Mitchell and even legendary film composer Hans Zimmer. What makes Reservoir different is that Golnar built the company through acquisitions.

You might think of a traditional record label as sending people out into dive bars to find new talent and then break new artists. But Reservoir doesn’t do any of that. It buys catalogs of existing hit songs from established artists. Reservoir owns the songwriting copyrights to about 150,000 songs and another 30,000 copyrights in master recordings.

As Golnar explains, Reservoir thinks of those individual songs as assets, and after acquiring them, the company sets about monetizing those assets in various ways. This is a copyright-based business in an age where copyright is under a lot of pressure. There are the familiar issues on social platforms like TikTok and YouTube. And now, there are new existential issues created by generative AI tools. You’ve all heard of fake Drake. Fake Drake is going to upend copyright law one way or another, and it’s the music industry that traditionally leads the charge in pushing back.

Golnar founded Reservoir in 2007. She’s been in this game for a long time, and she’s seen a lot of tech-related changes come and go. But now, there are huge companies and private equity firms pouring tons of money into the same catalog-based business model, sometimes with disastrous results.

You’ll hear Golnar say all of her competitors seem to have a billion dollars to spend on songs. And you’ll hear us talk about a company called Hipgnosis, which spent a ton of money building a giant catalog but now has very unhappy shareholders after that catalog wasn’t worth what they were promised.

Of course, Golnar and I also talked about AI and training AI systems. A lot of record labels are very unhappy that their copyrighted work is being used to train generative AI tools. And a lot of artists are even more unhappy that their voices are being used by AI systems. Golnar has some surprising thoughts here and one very instructive example she brought in to share. It’ll definitely make you think about who should be making money on what and when.

If you’re a Decoder listener, you know that I love thinking about the music industry. Whatever technology does to music, it does to everything else five years later. So paying attention to music is the best way I know to get ahead of the curve. I also just love music. Golnar is herself a musician. She obviously cares about music a lot, and she’s clearly given a lot of thought to what happens next. So this was a great conversation.

Okay. Golnar Khosrowshahi, CEO of Reservoir Media. Here we go.