Udio, the well-known AI music generation company, is restructuring. Going forward, generated works will only be listenable on the Udio website, and all works used to train the AI will be properly credited and compensated.

We want to inform you about our first AI licensing deal, which we view as strategically relevant for artists and labels, and as an important and progressive step for the music industry.

In this newsletter, you will learn:

• who Udio is,
• what the deal specifically regulates,
• how you can benefit,
• and what protective measures are in place.

Udio is an AI music platform that allows users to generate, modify, or reinterpret music using artificial intelligence. Founded in December 2023 and publicly launched in April 2024, it has already attracted millions of users and a large global creator base.

Udio is transitioning from its old “legacy” model—where music could be freely generated, downloaded, and shared across all DSPs—to a fully licensed system based on contractually regulated rights.

In the coming months, Udio will therefore retrain its model using licensed repertoire.

The core product (planned for 2026) will be a paid subscription model within a so-called “walled garden” system, meaning that content and outputs remain accessible only within Udio’s platform and cannot be freely downloaded or distributed elsewhere.

The launch date of the new service has not been announced yet, but it is expected to take place later this year. We’ll keep you updated as soon as more information is available.

With us as your distributor, you now have the opportunity to make your music available on Udio and benefit from it.

This agreement sets an important market standard:

• AI companies must license music rather than scrape it for free.
• A functioning market for AI training that respects copyright is being established.
• Independent labels retain a seat at the table as the future of AI is shaped.

What Is Specifically Regulated?

1. Licensed, Closed Product Approach

• The core product is a subscription model.
• “Walled Garden”: AI outputs cannot be freely downloaded or distributed to DSPs
• If Udio intends to launch additional products in the future, a separate agreement would be required, and you would of course be informed in advance.

2. Rights & Grant of Rights

• This is strictly a sound recording agreement.
• Publishing is handled separately by Udio.
• Delivering music for AI training does not grant permission to use an artist’s voice or identity.
• Artists retain full control over the use of their voice.

3. Clear Guardrails & Technical Protection Measures

Udio is contractually obligated to:

• Block artist names and track titles in prompts (unless authorized).
• Prohibit the use of AI-generated tracks to train future models.
• Use Audible Magic (fingerprint system) to detect and prevent copyright infringement.
• Fingerprint all AI outputs to monitor and prevent unauthorized distribution.
• Provide the necessary data for track-level royalty reporting and verification.

Additionally:

In the event of a takedown (rights change or valid claim), Udio will remove the relevant content and retrain the models at the next available opportunity, and in any event within 12 months.

4. Compensation

Compensation is usage-based.

You benefit when your music:

• is used for AI training,
• is referenced in generation processes,
•  or is consumed within the system.

This is not a flat fee arrangement, but a model that reflects actual usage.

5. Important Notice Regarding Content Delivery

No fully or predominantly AI-generated content may be delivered to Udio.

In short:

• • AI is being regulated rather than ignored.
  • Your rights remain fully protected.
  • Artist identities must be explicitly approved before use.
  • Strict technical safeguards are contractually secured.
  • Takedown and retraining rules are clearly defined.
  • Compensation is usage-based.
  • The launch of Udio’s new service hasn’t been announced yet. More information will follow soon.

Will I lose rights to my recordings?
No. Master rights remain fully with you.

Are artist voices automatically authorized?
No. Any use of voice or identity requires separate approval. Details on how this approval will be given will be shared by Udio later.

Can I exclude only specific artists or releases?
No. The decision applies to your entire catalog.

Can AI tracks be freely distributed in the market?
No. The system is designed as a closed environment (“walled garden”).

Why do we support this deal?
Because it ensures licensing, control, protective mechanisms, and compensation — instead of unregulated use without influence.

If you have any questions or would like an individual assessment, please feel free to contact us at any time.