A global economic study shows human creators’ future at risk from generative AI and policy makers must safeguard creators’ rights and implement transparency rules as revenues at risk of loss for creators by 2028 could amount to 24 percent in music and 21 percent in audiovisual.

The study, also supported by the Indian Performing Rights Society, was commissioned by CISAC (International Confederation of Societies of Authors and Composers, representing over 5 million creators), and conducted by PMP Strategy globally.

The first ever global study measuring the economic impact of AI in the music and audio-visual sectors calculates that Generative AI will enrich tech companies, while substantially jeopardising the income of human creators in the next five years, according to a media statement issued yesterday by those who commissioned the report.

While the revenues of Gen AI providers will see dramatic growth over the next five years, creators risk losing a large share of their current income due to AI’s substitutional impact on human-made works. Despite providing the creative fuel of the Gen AI content market, music and audiovisual creators will see respectively 24 percent and 21 percent of their revenues at risk of loss by 2028.

This amounts to a cumulative loss of Euro 22 billion over the 5-year period (Euro 10 billion in music; Euro12 billion in audiovisual).

The study finds that the market for music and AV content generated by AI will increase exponentially in the next five years, growing from around Euro 3 billion now to Euro 64 billion in 2028.

The economic study assesses that, as a result of this exponential growth in the market for music and AV content, the future revenues of Gen AI providers will rise to annual revenues of Euro 4 billion in music (up from Euro 0.1 billion in 2023) and Euro 5 billion in AV (up from Euro 0.2 billion) by 2028.

These are revenues derived directly from the unlicensed reproduction of creators’ works, representing a transfer of economic value from creators to AI companies.

In the music sector, the streaming and music library markets will be strongly impacted by AI. By 2028, Gen AI music is projected to account for approximately 20 percent of traditional music streaming platforms’ revenues, and around 60 percent of music libraries’ revenues.

The projected revenue loss will also be substantial for AV creators. Translators and adaptors for dubbing and subtitling will experience the strongest impact, with 56 percent of their revenue at risk, while screenwriters and directors could see their revenues cannibalised by 15 to 20 percent.

The study concludes: “In an unchanged regulatory framework, creators will actually suffer losses on two fronts: the loss of revenues due to the unauthorised use of their works by Gen AI models without remuneration; and replacement of their traditional revenue streams due to the substitution effect of AI-generated outputs, competing against human-made works”.

Rakesh Nigam, CEO, Indian Performing Rights Society said: “The CISAC report sheds critical light on the far-reaching economic impact of generative AI on creators, particularly in the music and audiovisual sectors. While AI offers immense possibilities for innovation, it also poses significant challenges to the livelihoods of songwriters, composers, and other creators who form the bedrock of the creative economy.

“At IPRS, we firmly believe that robust policies are essential to ensure fair compensation and safeguard the value of human creativity, which fuels the very foundation of AI-driven content. This study is a timely wake-up call for policymakers and industry stakeholders to address these challenges collaboratively and equitably.”

CISAC President Björn Ulvaeus has welcomed the study as a guideline to policy makers in legislative debates around the world by saying, “For creators of all kinds, from songwriters to film directors, screenwriters to film composers, AI has the power to unlock new and exciting opportunities – but we have to accept that, if badly regulated, generative AI also has the power to cause great damage to human creators, to their careers and livelihoods.

“Which of these two scenarios will be the outcome? This will be determined in large part by the choices made by policy makers, in legislative reviews that are going on across the world right now. It’s critical that we get these regulations right, protect creators’ rights and help develop an AI environment that safeguards human creativity and culture”.

CISAC Director General Gadi Oron said: “CISAC commissioned this study from PMP Strategy to show the enormous value that copyright works bring to Gen AI companies. Its conclusions point to a fundamental flaw that is opening up in the market, with creators’ works being unfairly and unethically appropriated to boost the revenues of Gen AI providers, while leaving the creators themselves out of this growth.

“There is a critical message here for policy makers: they must act urgently to safeguard human creators, culture and creativity. They must ensure that human creators are protected, can exercise their legal rights and can demand transparency from AI services. With these principles enshrined in the AI environment, this can be a win-win for creators and the tech industry rather than a threat to our culture and creative sector”.

The study is the first of its kind to estimate the economic impact of Gen AI on creators of music and AV productions on a global level. It combines qualitative and quantitative research, using Gen AI application case studies to identify areas of greatest impact and converting these into economic estimates on the market penetration of Gen AI services and the revenue losses to creators. It also provides estimates of Generative AI tools and services’ revenues that can serve as a basis to calculate remuneration schemes for creators.

The International Confederation of Societies of Authors and Composers is the world’s leading network of authors’ societies (also referred to as Collective Management Organisations, or CMOs). CISAC protects the rights and represents the interests of creators worldwide. With 227 member societies in 116 countries, CISAC represents over four million creators of music, audio-visual, drama, literature, and visual arts.

PMP Strategy is a strategic management consulting firm, whose sectoral  expertise extends to four focus areas: Telecoms, Media & Technology, Transportation & Mobility, Energy & Industry Decarbonization (with a focus on new energies, hydrogen, and decarbonization), and Financial Services & Institutions. It operates from three key hubs ofEurope, North America and the Middle East.