Mark Cuban discusses how AI, prediction markets and more may affect the music business, which he has in the past called 'the worst industry ever.'
at South by Southwest on Friday to talk about why he’s previously said in interviews, and on episodes of the hit TV showthat music — along with other products like liquor brands and clothing lines — is “the death” for investors.
The conversation, hosted by Kristin Robinson, was released on Wednesday as the first-ever live episode of On the Record,“Yeah, I think it’s the worst industry ever,” Cuban says with a laugh. “No, it’s probably tied with clothing, branded clothing…that’s the worst, and music is right behind it.” Later, the investor clarified that he was specifically referring to new music and the record labels that release it. To Cuban, older music, also known as catalog, is in a different category entirely — as is music tech.During the wide-ranging conversation, Cuban talked about how music has become an “asset class,” how his company Cost Plus Drugs can help alleviate financial challenges for artists, why AI agents will create more artist independence and why he thinks the music industry has a lot to learn from sports about integrating prediction markets and betting. You’ve said you don’t believe music is a great investment, but we are seeing a lot of players from the financial world, like KKR and Shamrock, now interested in buying catalogs, like To me, that’s not really music investing. It just happens to be music that is the vehicle for their investment. Licensing revenue for music is really consistent, but most artists really haven’t been able to get a big cash out yet, so someone like a KKR or another big investment company will just come in and say, “Okay, I’ll give you all this money .” And they just see it as, you know, “Here’s my returns.” It’s almost like owning an apartment building for them. Often, when I speak to investors who are weary about investing in new music tech companies, they say that the exception is that they wished they invested in Spotify. Spotify dominated the streaming era, and now you could argue we are moving into the AI era. Do you think that there’s going to be another opportunity for a Spotify-level AI music company to emerge? It depends on how consumers take to AI-generated music, because if they see it as an equivalent to what an artist produces, then yes… We don’t know how people are going to respond to purely AI-generated music, but we’re seeing some of it roll up the , so it isn’t that people are absolutely saying no, we just don’t know if they will truly say yes to it. One thing that a lot of people in the music industry, especially investors in music catalogs, believe is that the music industry is recession-resistant. That music is not correlated to the overall market and will still thrive if the economy tanks. What do you think? I think it holds up because the worse things are, the more people need music, you know? I’m a big believer that music soothes the soul and makes life livable. But at the same time, again, what is the source of that music? Is it AI or human? That’s what we don’t know. Your career really took off during the dot-com bubble when you sold Broadcast.com to Yahoo. Do you think we are in an AI bubble right now? I think for private companies, the economics may be a little bit rich right now, because, like back then, anybody with a website could go out there and raise a million dollars. Now, if you have any amount of decent AI technology, you could raise, in some cases, tens of millions of dollars, but back then, it was a public company bubble. Now, because it’s geared towards private companies, it’s not really a bubble by definition, because most people can’t participate.
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