Believe/Tunecore Partners with Suno, Spotify, AI Music, & the Money Behind It

The music industry says it’s protecting artists from AI. But what happens when the money changes? Believe went from declining to distribute releases created with Suno to striking a deal with Suno. Spotify is restricting the reach of AI personas while developing ways for users to create licensed AI remixes and covers. This isn’t a pro-AI argument. It’s an anti-hypocrisy argument. The question is: How much of the music industry’s stance against AI is really about protecting artists, and how much is about protecting existing business models?

Believe, TuneCore and Suno: What Changed?

This is something that I’ve been really eager to get to. I’ve just been busy, you know, building tools like the Music Distribution Selector and the ROI Calculator. So first, we can dive into some of these platforms that have taken a stand on protecting artists and are trying to make it seem as if that’s what they’re doing with their stances against AI, and dismantle the fact that that’s not the case. That’s not what they’re about. And this isn't a pro-AI thing. This is just an anti-hypocrisy type of thing.

First, you have the businesses. You have Believe. You have Spotify. Believe declined to distribute releases that were created using AI platforms that it didn’t have partnerships with. So the stance was never, “We’re against AI. We’re against AI replacing artists. We’re against people using AI to create music.”

Their stance was: What’s in it for us?

Especially when you look at TuneCore, which Believe owns. You have a digital distribution service charging a flat annual fee where you can pay around $60 a year and distribute an unlimited number of releases. The fact of having people sign up and distribute music isn’t all that valuable to them. Those people are likely going to pay one fee for the year and flood their platform with releases that were auto-generated from Suno or whatever other AI platform, potentially creating a nightmare scenario of copyright infringement flags, streaming fraud accusations, and other problems. So, on one end, it’s counterproductive because it’s like a restaurant declining to sell food to a certain group of customers, which means the restaurant makes less money. But on the other end, it’s like an all-you-can-eat buffet that restricts a customer who will come in, sit there for 24 hours, and literally try to eat all they can. And the reality is that the money isn’t in the artist. The artists have the least amount of money to spend.

Suno and these AI platforms are big companies. Companies that can potentially IPO and become publicly traded companies generating billions of dollars. That’s their potential. What you want is money tied to them and the kind of money that they can generate, as opposed to getting these trickle-down pennies from artists who make music using them.

With Believe, it was a leverage play. And I ain’t mad at them. It was smart.

Was Believe Really Taking a Stand Against AI?

Now, there are a lot of digital distribution companies out there, so it’s not like they have a whole lot of power to say, “Hey, we’re not going to distribute music from Suno,” so now nobody can distribute music. It ain’t effectively shutting down the opportunity for people to do it. It’s not like the incentive goes away where Suno is like, “Aw, shucks. Now people using our platform to generate releases can’t get them on Spotify.” That’s not the case at all. It's virtue signaling. 

TuneCore looks like they’re taking a stand against AI. It also looks bad for Suno to have a top digital distribution company say, “We’re not accepting your releases.” And perception is worth a lot. For Suno, the value is in not looking like vultures, not looking like an entity here to squeeze the life out of the music industry, kill off artists, and replace them with AI-generated music.

But you look at it and say, okay, well, what’s in it for Believe? Some virtue signaling there as well. Right now, Believe looks like they stood up for the rights of creators, where this agreement means participating artists can financially participate in the use of their music in connection with Suno. If their music participates in Suno’s models, there’s potentially some revenue in it for them. But that doesn’t really benefit Believe unless there’s a revenue share; unless TuneCore - and its parent company, Believe - are taking a percentage, it's not a benefit to them. And digital distribution has a transparency problem. It has a transparency problem when it comes to what it already does, let alone something like this.

Show Us the Economics of the Deal

Digital distribution companies are not record companies. They don’t own catalogs. They don’t own the rights to the master recordings. They don’t own percentages of publishing catalogs. For the most part, they do not share in the financial upside of releases. They get an annual fee. This announcement of the deal is likely the first and last time we'll hear about it. After they say, “Hey, Believe has taken a stand. They’ve got this deal now. Artists are going to benefit from their usage on Suno,” they get the reward, everybody celebrates and gives them the pat on the back, this all goes away, and the transparency around the terms of these deals becomes irrelevant.

You think about the way record companies tend to move. A record company doesn’t come with a catalog of music into negotiations with an AI platform like Suno and say, “All right, pay us per usage, where anytime one of our releases finds its way into a song generated on your platform, you cut us some tiny fraction of a cent for that usage.” 

They come and say: Give us equity. 

They come and say: Give us an advance. Give us bonuses.

There’s usually some type of lump-sum payout that happens before the per-usage money starts to come in. Often, the per-usage money is being applied against money that was given upfront. So they get a lump sum upfront, and then the usage deducts from the money they got upfront. The money is already there. That was the incentive for them to sign the agreement.

So what you want to know with the digital distribution company is: Is the same thing happening there? Did they get some money upfront? Are they getting bonuses? What’s the deal there? We don’t know.

The $10,000 Basketball Player Problem

It can be like somebody is giving me $10,000 to pay you per shot you make in a basketball game, but you’re a terrible shooter. Now I get to hold on to that $10,000 for God knows how long because I’m only required to pay you when you make a shot. I can flip that money 100 times over through investments and interest-bearing accounts and turn $10,000 into $100,000 that you don’t get a penny from.

And to a great extent, having your music participate in generative AI models is a lot like having it available on Spotify. Just because it’s there doesn’t mean it’s going to get streams. Just because it’s available for an AI entity to learn from doesn’t mean that the AI entity is actually going to learn from it. It doesn’t mean that it’s automatically going to be sourced in new works. And attribution with this whole thing is not an exact science, which we’re going to dive into later.

Spotify’s Fight Against AI

Spotify has taken some pretty strong stances against AI, in addition to some digital distribution companies. Why? Well, I don’t think it’s about protecting the interests of artists, as much as they might want that to be what you take away from it. It’s more about protecting their interests. Spotify has talked about AI releases flooding the platform, spam, deception, impersonation, and royalty diversion. But there’s another economic layer underneath that. With the monetization model they have, you have a shared revenue pool. Money that goes toward one group of rights holders isn’t going toward another group of rights holders. Now, the reality is that most of these releases don’t really make any money. It’s the collective. Thousands upon thousands of releases earning a penny per song or a few cents per song amounts to a lot of money that comes out of the pool. 

Just because you can generate a song doesn’t mean people are going to listen to it. Every artist knows that. Everybody who has signed up for DistroKid or TuneCore and thought, “Hey, I’m about to put my music up, it’s going to blow up, and I’m going to make all of this money from people listening,” only to make 40 cents a year, understands that you can build it and they won’t come.

The Name on the Marquee

Spotify is dependent on major-company licenses because the artists signed to major record companies are the ones they lead with in their pitches. They’re saying, “Hey, come here and sign up to be able to stream the music of Taylor Swift and Sabrina Carpenter.” That’s the pitch. That’s the attraction. Those are the names that go on the marquee. Even if people mostly enjoy the performance of the opening act, and the opening act does a bunch of encores, and the main attraction came out and gave you five minutes, you bought a ticket to see the main attraction. The big money has to go to the main attraction. They're driving the ticket sales. By protecting the revenue ecosystem for the major labels, Spotify protects its interests.

Suno Isn’t Just Competing With Artists

Now, the other end of this is the threat that platforms like Suno present to platforms like Spotify, because they are a threat. Suno can technically replace Spotify. They’re only licensing agreements with the major record companies away from replacing Spotify. And there’s more incentive for people to be on Suno than there is on Spotify, which I explore in another video where I break down how Suno is going to replace Spotify.

Right now, Spotify is the biggest name in streaming. If somebody makes a release, that’s where they want the release. They want it on Spotify. They want the potential to get playlisted, get on editorial playlists, get streams, and make some money from those streams. That’s the desire. 

Spotify restricts the reach of AI personas. If you're releasing music as an AI persona, they’re going to restrict your reach and not allow your music onto editorial and algorithmic playlists by default, which severely impacts your ability to earn from those releases.

Spotify Could Help Build Its Own Competitor

Now, here’s the thing. That can empower and expedite its replacement taking place with Suno. People want to make music using AI tools, and friends and family are enjoying the music they’re making with AI tools. If they can’t get meaningful reach on Spotify, then it stays on Suno. That effectively gives Suno exclusives. Everybody goes there, makes music, shares it with friends; people come, they listen to it, they spend more time on Suno than Spotify. Spotify starts to lose users and money. And that can’t happen.

So Spotify now has a feature coming where they allow their users to create licensed AI remixes and covers of participating artists’ music. Effectively, what would be most attractive to the general public- making music like the artists they’re fans of and remixing the music of artists they’re fans of- Spotify is allowing them to do on Spotify. That keeps them off Suno. And then they’re taking away the incentive for them to use the competitor. The question here with Spotify and their whole remix thing is: Will those releases be eligible for editorial and algorithmic playlist placements? And what are the rules around monetization with those releases? Are they going to share the revenue they generate between the person who created it and the artist? Who knows what all of those rules are going to be? But generally, Spotify knows what’s coming.

They Aren’t Against AI. They’re Protecting Their Business Models.

All of these platforms that are like, “We’re taking a stand against AI.” No, they’re not. They want to virtue signal to artists, make people feel like they’re doing the right thing, but on the back end, they’re doing stuff to protect their business models, protect their interests, bring in revenue, make more money, and, to some extent, at the artist’s expense. Because a lot of this isn’t going to benefit a lot of the artists on the lower end. On the higher end, it’s different. You know, the established acts where somebody would go into Suno and say, “Give me a song that sounds like Drake,” like how you had that whole type-beat thing where producers were like, “Drake type beat,” “Swizz Beatz type beat,” you know, that type of stuff. Those guys will always make money. Everybody who is a celebrity-type brand, who has that type of influence with their name, they’re always going to make money.

But the artists on the lower end who need to fight to get attention and fight to get streams are going to suffer if a platform is being flooded with a whole bunch of covers, and a whole bunch of remixes of established artists’ works. The mainstream artists will continue to rake in most of the profit because now you’re not only competing against their version of the song, but everybody else’s version of the same songs. And for Spotify, that’s not a problem because, again: The name on the marquee is the name getting most of the profit.

Who Gets Credit When AI Learns From Music?

Now, let’s talk about the complications with generative AI models and assigning credit and attribution. To some extent, it’s like somebody reading a bunch of books, learning how to write, then going off and writing a book. Then credit needing to be assigned to which books they learned how to write from. Even if somebody tells you they have the technology to trace influence and attribution, the power dynamics are still a problem.

It’s like Elvis Presley versus Chuck Berry. Whoever holds the power gets to dictate who’s responsible for what - even if that’s not the truth.

An indie artist creates a new style. A major-label artist jacks the style and makes it popular. Somebody goes into Suno and generates a song in that style. Who do you think gets the credit, the attribution, and the money from the releases created in that style? Likely not the independent and original artist, who doesn’t have the lawyer and doesn’t have the financial incentive of major corporations behind him.

Who Polices the People Making the Rules?

I mean, these industries don’t have independent oversight over all of this. You have record companies with a whole bunch of leverage saying, “Give us what we want, or we’ll pull our licenses and drag you into court forever.” And you have the platforms that are beholden to the record companies and their bottom line of making as much money as they possibly can. And they are the police. They are the FBI. They are the CIA. They are all of the companies that are supposed to be responsible for making sure that people follow and play by the rules. That’s their job. And they don’t have any incentive to make sure that everybody is playing fair. In fact, it’s counterproductive for them to want to make sure that everybody is playing fair.

Could AI Actually Make Artists More Money Than Streaming?

Now, on the other end of this, the optimistic view is the potential that this could make more money for artists than anything in human history. Because platforms like Suno, Udio - these types of platforms - have people paying for usage. The big problem with music right now and music streaming is that it’s capped revenue. Somebody pays a subscription fee every month, and they can listen to an unlimited amount of music. The more music they listen to, the lower the value of their subscription fee. With these other platforms, they’re capping the amount of music people can make for their subscription fee and charging them to go over. People have to pay to generate more. There’s more money coming in when people want to create more. And people are willing to pay more than what they would pay for a streaming platform because it’s self-serving. It’s something that they feel like they’re getting something out of. They’re on there. They’re creating music. They’re having fun. They’re sharing music with friends. Potentially, it’s something that could make them money, so they see a business opportunity in it too. People are way more likely to spend a lot more money there. There’s a bigger pool of money to be divvied up. That’s the big difference.

Streaming Monetizes Access. Generative AI Monetizes Activity.

Streaming monetizes access. Generative AI monetizes activity.

With streaming, more consumption doesn’t necessarily mean more money enters the system. With generative AI? Create more. Pay more. Use more. Pay more. The pie can actually grow. So, to some extent, you could see artists making a living off of these platforms if rights holders actually participate in that expanding pool. Imagine if music wasn’t fighting over the same subscription money anymore. Imagine every time people wanted to create more, remix more, download more, or export more, more money entered the system. Now you’ve got a growing pie instead of everybody fighting over how to divide the same pie. It could revolutionize things for artists.

The Problem Is Whether Any of This Will Be Fair

The downside is that it has to be fair. And I don’t think it will be because the incentive isn’t there for it to be fair. There is no independent entity providing the oversight to make sure things are fair. I’m not interested in “AI good” versus “AI bad.” The questions are:

Who gets paid?

How much?

Who determines attribution?

Who audits it?

And who benefits when the public never gets to see the terms?

The music industry doesn’t need another press release telling artists somebody is protecting them. Show us the deal. Show us the money. Show us how it’s divided. Then let artists decide whether they’re being protected.