Chapter 1: What is the main topic discussed in this episode?
Hey Smarties, it's Kimberly. Make Me Smart is taking some time off for the holidays, hope you are too, but we're going to be back in the new year. In the meantime, we're sharing some of our favorite episodes of 2025 and some amazing work from our friends at other Marketplace shows. Here's one of my favorite Make Me Smart episodes of the year. Enjoy. Hello, everyone. I'm Kimberly Adams.
Welcome back to Make Me Smart, where none of us is as smart as all of us. Today, we're going to take a look at the music business, and there is a lot going down in that industry, both with big artists and behind the scenes. You may have heard recently that the AI company Anthropic agreed to pay authors $1.5 billion to settle a
an AI copyright case and while yes this has big implications for the news and the book publishing industries we wanted to talk about what this might mean for the music business where there are a bunch of copyright fights happening right now and for that we are joined now by Dan Runcie who is the founder of Trapital a music and entertainment research group and Dan is here to make us smart about this industry and other industry news Dan welcome to the show
Thank you so much for having me. Excited to be here.
So what does this Anthropic Settlement mean for the music industry?
The Anthropic Settlement was big, and I think a lot of people in the music industry, specifically on the legal side, opened their eyes up because they saw a pathway for what the future could look like, especially with some of the ongoing legal disputes going on. The major record labels...
Universal Music, Sony, and Warner have sued some of the AI companies that are using generative AI music, like Suno and Udio, because they believe that those companies had trained their models with the music that Universal Music Group and others own and are the rights holders to. So what we saw in the Anthropic case play out is that there was a settlement that was reached because they...
deemed that there was copyright infringement based on the book authors from pulling that same information and pulling that same media and using it to train anthropics models, such as Claude, the generative AI platform that a lot of us use. So from a high level, we think this may end up in a similar settlement, maybe likely a smaller dollar amount, just given some of the terms that are discussed.
But I do think that people see that what happened with Anthropic and the book publishers could be a precedent for what happens with music.
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Chapter 2: What does the Anthropic copyright settlement mean for the music industry?
So what you're seeing right now play out with the major record labels and the lawsuits that they have with Suno and Udio, the labels are pushing that there is a copyright infringement case. But on the other side, Suno and others are saying that this could be a fair use example.
There is some room to be debated on whether or not the Sunos and Udios actually did buy versus did they get from YouTube or other sources. We don't know the details of that. That's in the actual filings themselves. But that's just one example of how this fair use distinction can be debatable.
There's another fair use fight happening in the music world right now. Music commentators say that Universal Music Group has been just hitting them with a deluge of copyright claims over these short clips of music that they're using in their videos, often just to demonstrate like, hey, we're going to talk about this song. Here's a clip of it.
And then they end up getting hit with these copyright claims and their videos are taken down or they get flagged by YouTube. How is that fair? different from the normal way we use fair use.
The challenge of that, and that is something that I've even experienced myself with someone that puts out videos on YouTube and other platforms. There's a few things happening here because certain platforms do tend to be a bit more sensitive, you could say, to potential copyright claims or to the DMCA takedowns. That's the Digital Millennium Copyright Act takedown notices.
And YouTube does tend to be a bit more sensitive or does tend to send more of these claims. And that's for a few reasons. YouTube, compared to some of the other social media platforms, contributes more revenue overall to the underlying creators behind its platform. So there's often therefore more dispute about how the pie gets split between who gets what.
And additionally, YouTube has a much stronger content ID platform. That is the...
infrastructure that youtube has built that if you or i were to upload a song or to upload a video that has a song in it they can automatically scan a video and determine whether or not we use this particular song and determine the use of whether or not that song is valid or not the challenge is this even if you are interviewing someone that is the subject of the topic you're talking about you naturally want to include their music in your video or in your clip or in your episode
does that person actually own the underlying music? And as ironic as it may seem, that can often be a very debatable issue. And sometimes it's the major record labels that own it. And you would think that there's a case to be made. You're naturally talking about the product. Wouldn't it be fair use that you're actually there for promoting and discussing it?
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Chapter 3: How is music copyright different from book publishing copyright?
They're trying to invest in the next catalog like Queen or Michael Jackson, something that is proven that they know will have the built-in fan base year after year and is a lot more predictable. And that is likely going to create an ongoing tension between how these companies run, the artists that they're trying to sign moving forward, and how those incentives will align.
So I think that's something that will continue to shape this industry.
Dan Runcie is the founder of Trapital, which is also a podcast. Y'all should check it out. Thanks so much, Dan.
Thank you. This was fun. Thanks for having me.
All right, before we wrap up for the day, we have a win from one of our listeners to celebrate. Let's hear it.
Hi, Make Me Smart team. My name is Nick. I'm calling from Los Angeles, California. And as of last Friday, the show that I've been working on for about a year and a half that I production managed, came out. It's called Knights of Guinevere. It's on YouTube. And it already, I think at this point of me calling, it's passed 8 million views, which has been very cool.
And that sounds very cool. Knights of Guinevere. All right, I have to check it out. Anyway, don't forget to keep sending us your wins. You can leave us a voicemail at 508-UBSmart or email us at makemesmart at marketplace.org. Okay, that's it for today. We are going to be back tomorrow for Economics on Tap.
The YouTube live stream starts at 3.30 Pacific, 6.30 Eastern, and I'll be joined by another special guest this week for some news, drinks, and a game. I'll give you one hint. Fat Bear Week. Make Me Smart is produced by Courtney Bergseeker. Today's program was engineered by Jessen Duller. Ben Talladay and Daniel Ramirez composed our theme music.
Our interim supervising senior producer is Stephanie Seek. Nancy Fargali is executive producer of Marketplace Shows. And Marketplace's vice president and general manager is Neil Scarborough.
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