MBW Reacts is a series of analytical commentaries from Music Business Worldwide written in response to major recent entertainment events or news stories. Only MBW+ subscribers have unlimited access to these articles.
While the music industry fixates on Suno’s AI generation capabilities and copyright controversies, a more fundamental shift may be underway.
The company could be building a very different, and potentially deep-pocketed, superfan app.
WMG and Suno stunned the global music industry yesterday (November 25) with the news that they had settled their copyright lawsuit and struck a “first-of-its-kind” licensing partnership for AI-generated music.
According to a blog post from Suno CEO Mikey Shulman, his platform will “be introducing content from WMG artists who opt in for the use of their names, images, likenesses, voices, and compositions to be used in new AI-generated music”.
Shulman added: “These will be new creation experiences from artists who do opt in, which will open up new revenue streams for them… and allow you to interact with them in new ways. You’ll be able to build around participating artists’ sounds and ensure they get compensated.”
With the WMG settlement and licensing deal in the bag, Suno still has to navigate ongoing copyright litigation from Universal Music Group and Sony Music via the RIAA, plus Denmark’s Koda, Germany’s GEMA, and independent artists.
However, the second-to-last paragraph of WMG’s Suno press release yesterday contained an unexpected twist: the major label divested its concert discovery platform, Songkick, to the AI company as part of the deal.
So, why is a recorded music generation app interested in acquiring a live music discovery app?
On the one hand, it appears counterintuitive. After all, the AI music generated by Suno has no live performance component.
There’s no artist to tour, no stage to build, no venue to book, and if we’re being honest, the majority of users generating tracks likely lack the technical ability to perform their creations live, as admitted by Xania Monet’s creator, Telisha “Nikki” Jones, in a Wall Street Journal interview. “I grew up singing in church, but I can’t do vocals as powerful as what I created with Xania,” she said.
But think beyond the obvious, and consider what Suno has just assembled.
Suno currently commands a $2.45 billion valuation backed by $250 million in fresh capital. Nearly 100 million people have created music on its platform over the past two years, generating $200 million in annual revenue primarily from subscriptions.
Now add the 15 million users signed up to Songkick, tracking artists across six million listed concerts and festivals globally.
This isn’t just about size, it’s about depth of engagement.
Songkick acts as an aggregator of tour dates and ticket links from hundreds of sources.
Using Songkick to actively search for concerts to attend and then purchase tickets for those concerts via links to external ticketing sites is arguably an act of superfandom in itself.
As pointed out last week in an article by Midia’s Mark Mulligan, making music has also always been a form of superfandom, and users of generative AI music tools, he noted, “are also some of the industry’s most valuable superfans”.
“Creating” a song, even via AI prompts, represents a fundamentally different level of fan engagement than simply streaming a song. Suno users are not just consuming content; they might be trying to co-create within the musical universe of artists they admire.
Don’t forget that, since September, Suno has attempted to attract professional music-makers into its tech, via its DAW layer, Suno Studio.
“We’re heading towards a world where people don’t just press play – they play with their music,” Suno’s Shulman wrote in his new blog post. “Interactivity will make music a bigger part of people’s lives, increase its cultural value, and bring people closer together. This partnership with WMG is a big step towards that future.”
Suno’s Songkick acquisition and expansion into concert discovery are significant because Suno is buying an additional layer of actionable fan insights.
The platform now possesses behavioral data for millions of users spanning the entire fan journey:
- what music people want to create,
- which artists inspire their ideas, and crucially;
- which live shows they’re tracking and planning to attend.
According to yesterday’s press release, Songkick, which WMG acquired in 2017, will continue operating as what Suno calls “a successful fan destination.”
The companies claim the combination will “create new potential to deepen the artist-fan connection,” though the mechanics remain unclear.
What makes the Songkick element of the deal particularly intriguing is that none of Suno’s major investors appear to have existing positions in the live music or ticketing sector.
Suno’s latest $250 million round was led by Menlo Ventures with participation from NVentures (NVIDIA’s venture capital arm), Lightspeed, and Matrix.
However, Hallwood Media Ventures, the investment arm of the music company founded by former Geffen Records President Neil Jacobson, also participated. The company brings deep music industry expertise through a team that includes Universal Music Group’s ex-CFO Chuck Ciongoli, former Spotify Head of Global Curation Mike Biggane, and Paul Hourican, the former Global Head of Music Operations at TikTok.
Interestingly, Hallwood Media has also been expanding its operations to include merchandising services, ranging from product design and creative solutions to touring solutions:
The company’s merch division, according to the website, offers capabilities spanning e-commerce fulfillment and what it calls “experiential” services, including album release parties and pop-up activations.
Suno’s move into concert discovery also arrives against a backdrop of a booming live music business.
Live Nation CEO Michael Rapino predicts that the live music industry will reach $50 billion by 2030, building on historical annual growth of around 8%. Goldman Sachs forecast similar growth in its latest Music in the Air report.
Live Nation’s own Q3 revenues climbed 11% year-over-year to $8.5 billion, underscoring the sector’s momentum and potentially explaining why an AI company would want a foothold in live music infrastructure.
Whether Suno intended to build a superfan platform or simply stumbled into one through strategic acquisitions, the result is the same:
It has morphed into a $2.45 billion company, sitting at the intersection of music creation, discovery, and live attendance – with a new investor who clearly has ambitions in the merchandise game.
Music Business Worldwide
