Universal Music strikes strategic agreement with AI startup ProRata, which just raised $25m for a chatbot and tech to attribute and compensate content owners

Universal Music Group has struck a strategic agreement with a new AI startup called ProRata.

ProRata.ai has developed technology that it claims will enable generative AI platforms to accurately attribute and share revenues on a per-use basis with content owners.

According to Axios, ProRata has raised $25 million in a Series A round for its tech, for which it has several pending patents. The company’s early investors include Revolution Ventures, Prime Movers Lab, Mayfield and Technology incubator Idealab Studio.

Bill Gross, chairman of Idealab Studio, and widely known as the inventor of pay-per-click keyword Internet advertising, will serve as the company’s CEO.

Axios noted that the company also plans to launch a ‘subscription AI chatbot’ later this year. ProRata said in a press announcement on Tuesday (August 6) that this chatbot, or “AI answer engine,” will showcase the company’s attribution technology. Axios said that ProRata plans to share the subscription revenues it generates from the tool with its content partners.

The report added that Universal Music is just one of a number of media companies that have licensed their content to ProRata. The other companies at launch include The Financial Times, Axel Springer, The Atlantic and Fortune.

ProRata said on Tuesday that it is also in advanced discussions with more global news publishers, media and entertainment companies, and more than 100 “noted authors”.

ProRata explained in its press release that its technology “analyzes AI output, measures the value of contributing content and calculates proportional compensation”. The company then uses its proprietary tech to “score and determine attribution”.

Added the company: “This attribution method enables copyright holders to share in the upside of generative AI by being credited and compensated for their material on a per-use basis.

“Unlike music or video streaming, generative AI pay-per-use requires fractional attribution as responses are generated using multiple content sources.”

Axios reported further on Tuesday that ProRata’s CEO also intends to license the startup’s large language model to AI platforms like Anthropic or OpenAI, which “don’t currently have a system to attribute the contribution of a particular content owner to its bottom line”.

UMG sued one of those companies, Anthropic, in October for the alleged “systematic and widespread infringement of their copyrighted song lyrics” via its chatbot Claude.

Commenting on UMG’s partnership with ProRata, Sir Lucian Grainge, Chairman and CEO, Universal Music Group, said: “We are encouraged to see new entrepreneurial innovation set into motion in the Generative AI space guided by objectives that align with our own vision of how this revolutionary technology can be used ethically and positively while rewarding human creativity.”

“Having reached a strategic agreement to help shape their efforts in the music category, we look forward to exploring all the potential ways UMG can work with ProRata to further advance our common goals and values.”

Sir Lucian Grainge, Universal Music Group

Added Grainge: “Having reached a strategic agreement to help shape their efforts in the music category, we look forward to exploring all the potential ways UMG can work with ProRata to further advance our common goals and values.”

ProRata’s senior leadership team and Board of Directors include executives who have held senior leadership and engineering positions at Microsoft, Google, and Meta, as well as board members and advisors with extensive media and digital experience, including Michael Lang, President, Lang Media Group and one of the founders of Hulu.

“Current AI answer engines rely on shoplifted, plagiarized content. This creates an environment where creators get nothing, and disinformation thrives.”

Bill Gross

“Current AI answer engines rely on shoplifted, plagiarized content,” said Gross. “This creates an environment where creators get nothing, and disinformation thrives.”

Added Gross: “ProRata is pro-author, pro-artist and pro-consumer. Our technology allows creators to get credited and compensated while consumers get attributed, accurate answers. This solution will lead to a broader movement across the entire AI industry.”

John Ridding CEO, Financial Times Group, said: “There is an urgent need and opportunity to align the incentives of AI platforms and publishers in the interests of quality journalism, the reader and respect for intellectual property.

“ProRata’s approach – identifying source material and sharing resulting revenues between technology companies that use it and publishers that create it – can help develop a healthier and fairer information ecosystem that encourages accurate and authoritative journalism and rightly rewards those who produce it.”

Nicholas Thompson, CEO of The Atlantic said: “ProRata is working to solve one of the most important issues in AI: how can LLMs properly credit and compensate the publishers of the work they depend on.

“With this partnership, we are working with them to establish first principles for media and AI – in a way that values, respects, and protects the exceptional talent and intense work of journalists and creators. We hope to see this approach to permissions, content controls, clear attribution, and fair value become the industry norm.”

Anastasia Nyrkovskaya, CEO, Fortune, said: “Fortune looks forward to exploring work with ProRata because we believe they place a high priority on proper attribution and compensation for quality content.

“The goal is to work together to bring Fortune’s world-class business journalism, valuable archives, and authoritative lists to new audiences with ProRata’s innovative approach to AI.”

 Music Business Worldwide