The BIG Opportunity
Vevo founder Rio Caraeff discusses the future of AI, AR and artistry
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When talking about the music business, there can be a sense that no one really knows where things are headed. Then you speak with someone like Rio Caraeff, who has worked at the highest levels of music and technology for over 25 years, and you suddenly feel like there might be a philosopher king who can see the rhyme and reason of it all.
From selling the first commercial MP3 (Duran Duran’s “Electric Barbarella,” 1997) to launching the world’s most successful online music video network, Vevo in 2009, Rio was one of the key players in creating the online music economy that generated $17.5 billion in revenue last year.
Not content to simply monetize music on a global scale, Rio left Vevo in 2015 to become Chief Content Officer for Magic Leap, where he peered as far into the Augmented Reality future as anyone in the industry, while also finding the bandwidth to serve on the boards of both Austin City Limits and Otis College of Art and Design.
Lately, he’s joined forces with legendary Apple designer Christopher Stringer to create the next generation of immersive spatial home speakers called Syng.
Most individuals with such a storied history find it difficult to put their accomplishments into a context that goes beyond dollars and cents. But Rio clearly sees where he has been and has as good a view as anyone as to where we’re all going.
That can make for a long and stimulating conversation. Below are Rio’s most salient statements from our talk. And if you want to watch the entire hour-plus exchange, it’s now available as our first Cadence Talks, which is now available to Premium Subscribers.
Rio Caraeff on:
The creativity of coding.
Anybody who's ever made software or built products understands that it's difficult and technical and creative at the same time. I would say it's no different than being a recorded music artist or being a live performance artist or writing a song. It's still an expression of your soul and creativity. Being a creator is unimpeachably a big tent.
Balancing ubiquity with scarcity.
I didn't want to tell Taylor Swift, “Hey Taylor, you can't put your video on your website.”
Ubiquity is the currency of the web. I have a bias towards choice and empowerment, whether you like going to YouTube or MTV or Twitter, [consumers] should have choice and videos should be everywhere.
So the strategy I came up with was basically ubiquity for the fan and ubiquity for the artist, but scarcity for the advertiser and brand marketer. That is how we restore the premium luster of the audience that loves music.
The rise of UGC.
Today, the role of music and user-generated videos — whether it's on TikTok, whether it's remixing, whether it's on YouTube or Instagram — is actually a much bigger business than the official videos.
The biggest change is the empowerment of the user to take music into their own hands and remix it and shape it and layer it and use it. I call that agency. There's an ascendant generation that now expects to have agency and influence and control over their media that's shaping how music is consumed and created going forward.
Music vs. the music business.
I'm always careful not to conflate music with the business of music. The business of music is relatively new in the grand scheme of things. It has no inherent right to exist.
But the pipeline to the soul — that emotional vessel that is music — has been with us for far longer and will continue to be with us. Businesses that are built on top of those emotional pipelines — like sports and music — I think are generally healthy and not going anywhere.
How AI will impact the music business.
I think the music industry is just about tipping into embracing AI. There are wildly variable opinions, but I've seen this every time there's a new technology in music. There's a period of whack-a-mole and a period of let's protect and defend our old business. And then there is the “Let's buy time to figure this out,” phase. And then, eventually, there's a commercial embrace of it.
I think that cycle — like all cycles — is accelerating. So I think in the next six months you'll see the music industry embrace AI and say, “This is how we're gonna bear hug it and turn it into a huge commercial opportunity.”
But what will it look like?
Anybody who has participation in various copyrights will be dealt in — to use the simple term. Instead of takedowns and blocking, it'll be 14% of this goes to me and 8% is trained on this song from this model.
Artists will be able to opt-in to have their voices used in various ways that could never have been done before. And they'll be able to have mechanisms of participating economically in that and creatively okaying and blocking what they're not okay with.
Where we’re at with AR.
[Working at Magic Leap], I feel like I got paid to go 10 years into the future and live in 2033.
It's much harder than making a bigger TV or a thinner phone or a faster computer. You get into a lot of the physics of light and optics.
It takes a lot of fuel to get to Mars. But I don't say anybody's spending too much money because of the size of the opportunity. It's a multi-trillion-dollar market. So if you spend 50 billion or a hundred billion to do that, that's not that much in the scheme of things.
Like we said, if you want to watch our full 60-minute conversation with Rio Caraeff, click here and upgrade to one of our paid tiers and get access to all of the premium material we have lined up.
TAKEAWAYS
Salient statements from this week’s music news.
1. ‘Boss and Swift Act‘ Proposed in Congress to Regulate Live Events Ticket Market
It aims to address problems such as hidden fees, on-sale transparency, buyer protections, speculative tickets, and deceptive websites, according to the bill’s authors.
Takeaway: The legislation builds on their previous efforts and addresses concerns raised in a Government Accountability Office study on consumer protection and competition issues in the ticket market.
2. Songtradr’s ‘SmartMusic’ Is Merging AI and Neuroscience To Identify Music That Drives Results for Brands
A new study of beer and beauty brands revealed a positive connection between music and business success.
Takeaway: The most successful brands used not only brand-aligned and distinctive melodies but also energetic and arousing music. Key findings of the study also revealed that brands could improve performance by taking a more strategic, consistent, and differentiated approach to music usage in advertising content. Moreover, choosing the wrong music (in terms of clashing sonic branding) could also damage brand preference.
3. Is the Music Business Slipping on Its Pledge to Diversity?
The progress promised in the wake of George Floyd has yet to manifest in a meaningful way.
Takeaway: A recurring concern raised by the Black executives who were interviewed was the absence of transparency and accountability when it comes to music companies’ diversity and inclusion efforts.
