Naxos Denies Deal Touted by KUKE

On Aug. 8, Mathias Lutzweiler, CEO of Naxos Music Group, released a statement: “We would like to clarify that no collaboration exists between KUKE Music and Naxos Music Group in relation to this platform nor has any agreement or arrangement been done with KUKE Music and the Naxos Music Group on this matter.”

His statement is in direct response to one from Beijing-based KUKE Music, which self-identifies as “the world’s leading provider of classical music content.” On August 6, KUKE announced a “strategic collaboration” with Naxos Music Group, whose catalog of over 3 million audio tracks makes it “the global leader in the realm of classical recording.”

KUKE was recently suspended from being listed on the New York Stock Exchange; it is now within a 12-month period of monitored compliance for reinstatement. Naxos and KUKE had an eight year-partnership agreement until last fall, when the former sued the latter for $2 million in monies owed.

The issue appears to have since been  settled, given KUKE’s restored NYSE  status. 

In any case, the partnership the Chinese company touts is not a reality. KUKE's statement declare its plan to use NAXOS content resources and service infrastructure to develop artificial intelligence (AI) innovations in classical music to build an AI-powered "Music LEGO Engine" that would “revolutionize the creation, rights verification, application, and value circulation of musical content.”

The plan was to pull apart copyrighted elements, such as melody “fragments,” harmonies, orchestrations, and performance styles and create standardized, independently identifiable, licensable, and combinable "modules." These “LEGO bricks” would create a “critical infrastructure” for AI training and copyright monetization.

If that sounds like an outright rip-off of copyrighted material, KUKE goes on to declare that each of the “bricks” would possess a “unique, immutable NFT-based copyright certificate” indicating the recording creator, licensor, and holder history to better enable copyright enforcement and dispute resolution. Continuing to sound too good to be true, KUKE’s new system would have “automatic royalty/licensing distribution” to enable “the elimination of currency barriers for cross-border revenue sharing and unprecedented global market access… Naxos’s content resources.”

In his statement of denial, Naxos CEO Mathias Lutzweiler notes that his company’s current global distribution system would continue to embrace “all forms of available technology to ensure broad accessibility” within the bounds of “contractual obligations” and “regulations.” In other words, we will continue to utilize our own networks, thereby working within established legal parameters.

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