{"id":54437,"date":"2025-08-09T06:50:26","date_gmt":"2025-08-09T06:50:26","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/54437\/"},"modified":"2025-08-09T06:50:26","modified_gmt":"2025-08-09T06:50:26","slug":"kobalts-ai-deal-with-suno-rival-elevenlabs-guarantees-publishing-parity-with-recorded-music","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/54437\/","title":{"rendered":"Kobalt\u2019s AI deal with Suno rival ElevenLabs guarantees publishing \u2018parity\u2019 with recorded music"},"content":{"rendered":"

Earlier today (August 5), music publisher Kobalt<\/a> announced<\/a> a landmark licensing agreement with ElevenLabs\u2019 new AI music platform, Eleven Music \u2013 a rival to Suno.<\/p>\n

<\/a><\/p>\n

Now,\u00a0MBW has confirmed details of this potentially precedent-setting deal, which could reshape the music industry\u2019s approach to\u00a0generative AI licensing.<\/p>\n

The opt-in agreement between Kobalt and $3.3 billion-valued Eleven Labs establishes what sources describe as \u201cparity\u201d between publishing and recorded music revenues. Each side will receive an approximate 50\/50 split of royalties generated from the AI platform.<\/p>\n

Perhaps most significantly, MBW has learned that Kobalt has secured a Most Favored Nation (MFN) clause in its deal with ElevenLabs, meaning that if any recorded music rightsholder now negotiates better terms than Kobalt\u2019s, the publisher will automatically be upgraded to match them.<\/p>\n

Kobalt\u2019s 50\/50 \u201cparity\u201d provision will sit alongside a separate deal inked with ElevenLabs by indie body Merlin<\/a> (and any other recorded music deals Eleven Music has struck).<\/p>\n

MBW understands that\u00a0Eleven Music\u2019s basic tier is trained on production music, but a forthcoming \u2018Eleven Music Pro\u2019 offering will soon be trained on cleared catalog from Kobalt and Merlin.<\/p>\n

The development comes as the music industry grapples with how to license generative AI platforms, with major labels and publishers pursuing legal action against companies like Suno and Udio for alleged \u201ccopyright infringement on a massive scale.\u201d<\/p>\n

ElevenLabs claims<\/a> that Eleven Music, a rival to Suno and Udio, generates \u201cstudio-grade music\u201d from \u201cnatural language prompts\u201d.<\/p>\n

\u2018Compensation comparable to sound recordings\u2019<\/p>\n

In a note sent to clients today and obtained by MBW, Kobalt CEO Laurent Hubert<\/a> outlined the key principles underlying the ElevenLabs agreement, including \u201cpublishing compensated comparably to sound recordings\u201d.<\/p>\n

This deal structure represents a significant departure from traditional streaming economics, where publishing typically receives approximately ~25% of total royalties compared to recorded music\u2019s ~75% share. In the United States, publishers often attribute this disparity to Section 115 of the US Copyright Act, which they argue prevents them from negotiating in a \u201cfree market\u201d.<\/p>\n

\u201cThink about what we\u2019re offering [AI] platforms: publishers bring the lyrics and the building blocks of the composition. Labels bring the recording. I think it\u2019s fair and logical to have parity.\u201d<\/p>\n

Publishing Source on Kobalt\/ElevenLabs deal<\/p>\n

A publishing source observing the Kobalt\/Eleven deal told MBW today: \u201cBecause of [section] 115, publishing gets locked into unfavourable rates without being able to negotiate in the free market. But when it comes to gen AI training, we can negotiate freely.\u201d<\/p>\n

They added: \u201cThink about what we\u2019re offering [AI] platforms: publishers bring the lyrics and the building blocks of the composition. Labels bring the recording. I think it\u2019s fair and logical to have parity.\u201d<\/p>\n

How Kobalt\u2019s \u2018pilot\u2019 will work with Merlin\u2019s own AI deal<\/p>\n

As mentioned, Kobalt\u2019s agreement with ElevenLabs exists alongside a separate contract between the AI company and Merlin.<\/p>\n

According to Hubert\u2019s client note, works eligible for inclusion in monetization from Eleven Music must meet two criteria as things stand: \u201c100% of the mechanical rights for the composition are controlled by Kobalt, and the corresponding master recording is cleared through Merlin.\u201d<\/p>\n

In future, any opted-in, fully-cleared Kobalt composition whose associated recording is represented by a licensed partner of ElevenLabs will also be eligible for monetization.<\/p>\n

Hubert\u2019s note further explains: \u201cMerlin has also reached a licensing agreement with ElevenLabs for masters, making a fully-licensed framework for these works possible for ElevenLabs. Other master and music publisher partners may follow in the future.\u201d<\/p>\n

\u201cMerlin has also reached a licensing agreement with ElevenLabs for masters, making a fully-licensed framework for these works possible for ElevenLabs. Other master and music publisher partners may follow in the future.\u201d<\/p>\n

Laurent Hubert, Kobalt in note to clients today (August 5)<\/p>\n

Hubert tellingly describes the initiative as a \u201cpilot\u201d \u2013 suggesting elements of the agreement could be rolled out to other platforms, and other rightsholders, in the future.<\/p>\n

Beyond the revenue-sharing structure, as MBW reported earlier<\/a>, the Kobalt-ElevenLabs agreement includes extensive content protection measures designed to prevent unauthorized exploitation of copyrighted material.<\/p>\n

These protections include \u201ccontent identification and protection systems, using a mutually-agreed, outside third party to detect and block copyrighted elements on the platform\u2019s output,\u201d according to Hubert\u2019s client note.<\/p>\n

According to Eleven Music\u2019s own terms and conditions page<\/a>, users are prohibited from entering prompts that explicitly name any artist\u2019s real name or stage name, any song or album titles, or any music publisher or label names.<\/p>\n

Could MFN clause reshape industry dynamics?<\/p>\n

Industry sources suggest the Most Favored Nation clause in Kobalt\u2019s agreement could have far-reaching implications for future AI licensing negotiations across the music industry.<\/p>\n

One potential downside? The MFN could arguably make deals with ElevenLabs potentially less attractive to large recorded music rightsholders keen on receiving a larger share of revenues than publishers.<\/p>\n

Then again, the 50\/50 revenue split established in the Kobalt-ElevenLabs agreement bears similarities to synchronization licensing, where publishing and recorded music rights typically receive more equitable compensation vs. streaming royalties.<\/p>\n

Hubert\u2019s client note framed Kobalt\u2019s opt-in agreement with Eleven Music as providing \u201ctrue choice in licensing Generative AI\u201d for rightsholders, allowing them to \u201cmake a clear and informed decision on whether to participate.\u201d<\/p>\n

A Kobalt spokesperson declined to comment when contacted by MBW about details of the publisher\u2019s deal with Eleven.Music Business Worldwide<\/p>\n","protected":false},"excerpt":{"rendered":"Earlier today (August 5), music publisher Kobalt announced a landmark licensing agreement with ElevenLabs\u2019 new AI music platform,…\n","protected":false},"author":2,"featured_media":54438,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[554,733,4308,86,56,54,55],"class_list":["post-54437","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-technology","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/54437","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=54437"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/54437\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/54438"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=54437"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=54437"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=54437"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}