A study released earlier this year found that 38% of the music on TikTok is modified in some way – tracks are sped up, slowed down, or have had their pitch changed.
According to Pex, the company that carried out the study, more than a million tracks on streaming platforms like Apple Music, Spotify and TIDAL are modified in some way.
That’s a problem for music rightsholders, because if a track can’t be properly identified, its royalties won’t flow to the right place.
In an interview with MBW earlier this year, Pex founder and CEO Rasty Turek estimated that about 1% of all streamed music is misattributed due to this phenomenon.
Now, a new AI company is positioning itself as the solution to the problem: Hook, whose app is currently in closed beta testing, promises to enable users to create remixes of tracks to use on social media – all properly licensed and authorized.
But to make Hook’s plan a reality, it needs to sign agreements with rightsholders.
That process is now underway, with Hook announcing on Thursday (August 22) that it has partnered with Downtown Music to bring potentially millions of Downtown’s tracks to the app and open up a new revenue stream for Downtown-linked artists.
The deal “could serve as a blueprint for how AI companies can successfully work with music rights holders,” the companies said in a statement.
“Downtown’s partners represent some of the most popular and impactful independent music in the world,” Hook Founder and CEO Gaurav Sharma said.
Sharma is no newcomer to the music business. He previously served as Chief Operating Officer at JioSaavn, India’s largest music streaming service, which reached a milestone of 100 million monthly active users (MAUs) before Sharma left.
“Fan-created remixes on social media are helping drive music discovery, re-discovery and virality — but the way it’s happening doesn’t support rights holders,” Sharma said earlier this year.
“Hook solves this problem by leveraging AI to let social media users express themselves creatively with music, while rewarding artists and rights holders at the same time.”
At the same time, Hook is “challenging the idea that music on social media and UGC only provides promotional value,” Sharma said.
“We believe fan remixing and UGC is a new form of active music consumption and rights holders should be paid for it. This deal represents a new model for music, social, and AI.”
He added: “The team at Downtown understands our mission and we’re humbled by their support.”
“We believe fan remixing and UGC is a new form of active music consumption and rights holders should be paid for it. This deal represents a new model for music, social, and AI.”
Gaurav Sharma, Hook
Indeed, it does seem that Downtown’s team understand Hook’s mission, as Downtown Music Holdings Founder and Chairman Justin Kalifowitz sits on Hook’s advisory board, alongside such notable music and tech industry players as DJ and producer KSHMR, SNAP Head of Music Partnerships Manny Adler, venture capitalist Abe Burns, Hundred Days Founder & Co-President Ben Klein, and Reed Smith LLP Managing Partner Gregor Pryor.
Other big names in music and venture capital are also behind New York-headquartered Hook, whose seed funding round was up to $3.5 million at last count, led by Steve Cohen’s Point72 Ventures and Waverley Capital, which was co-founded by Edgar Bronfman Jr., the former CEO of Warner Music Group who earlier this week made a last-minute bid for control of Paramount Global.
“Hook gives music fans the ability to put their own stamp on their favorite songs, it empowers artists to grow their audience and gives labels and other rights holders an avenue to a brand new stream of revenue,” Bronfman said last fall.
“Whilst music consumption continues to increase, broaden and localize, the trend of music ‘prosumption’ on social platforms is ever-growing,” said Harmen Hemminga, Downtown Music’s VP, Product & Services Strategy.
“Users of [social media] platforms are including music in the experiences they share with others across a variety of contextual, inventive ways. Hook offers rights holders the ability to monetize these new and creative forms of use.”
Harmen Hemminga, Downtown Music
“Users of these platforms are including music in the experiences they share with others across a variety of contextual, inventive ways. Hook offers rights holders the ability to monetize these new and creative forms of use.”
For Hook, the partnership with Downtown represents a major foot in the door to licensing content for its app, given the company’s 4 million artist and 5,000 business clients across its divisions, which include music publishing, distribution, artist & label services, and royalty & financial services.
For Downtown, it’s the latest in a growing number of tech-oriented integrations, including a partnership with AI-powered music marketing platform SymphonyOS, that gives Downtown Artists & Label Services clients discount access to SymphonyOS’ tools.
In 2023, Downtown acquired London-headquartered music tech company Curve Royalty Systems, whose founder, Tom Allen, now heads up Downtown Royalties & Financial Services.Music Business Worldwide
