Spotify and Universal Music Group (UMG) announced a licensing deal for recorded music and publishing rights, enabling Spotify to launch generative AI music models in the future. With this deal, Spotify’s models will allow fans to create covers and remixes of their favorite songs from participating artists and songwriters signed to UMG.

The new deal was announced on Thursday (May 21) as part of Spotify’s Investor Day presentation, and the company touts that it will open up additional revenue streams on top of what artists already earn on Spotify and will provide new discovery opportunities for participating UMG talent. These AI products will eventually become available to premium users as a paid add-on. It is unclear when they are set to launch.

The licensing deal — and the forthcoming models it supports — does not come as a total surprise. Last fall, Spotify announced that it was partnering with the three major music companies — UMG, Sony Music Group, Warner Music Group — as well as Believe and Merlin to create “artist-first” AI music tools. To create these models, Spotify said in a blog post at the time that it started building a state-of-the-art generative AI research lab and product team.

The announcement also included four key principles for developing its AI tech, including that artists and songwriters get a choice in participation. “We recognize there’s a wide range of views on use of generative music tools within the artistic community,” the announcement read. “Therefore, artists and rightsholders will choose if and how to participate to ensure the use of AI tools aligns with the values of the people behind the music.”

On an episode of Billboard’s On the Record podcast, Sam Duboff, global head of marketing and policy, music business, replied to an inquiry about the streaming service’s plans to build an AI remixing capability by saying: “We see our role as the biggest streaming home for professional artists today. We facilitate those connections between artists and fans through their music already. So we think we’re best positioned to help have AI power this next stage of the industry… not tools that are built to compete or kind of siphon off [royalties] from parts of the industry.”

Remixing has become a popular area of generative AI development in the music industry. Already, start-ups like Udio, Hook, Klay and others have been working on similar concepts that emphasize using the cutting edge tech for the customization of pre-existing, licensed songs, rather than using it to generate brand new songs from text prompts. It’s also a use-case that the music industry establishment seems much more comfortable with in general. While new AI songs leads to further market competition for artists and music companies, remixing existing tracks is often billed as a “fan engagement” product which can deepen the relationship between a fan and their favorite artist.

In a statement about the UMG deal, Alex Norström, co-CEO of Spotify, says, “Solving hard problems for music is what Spotify does, and fan-made covers and remixes are next. What we’re building is grounded in consent, credit, and compensation for the artists and songwriters that take part. Through each technological transformation, we have worked together with Sir Lucian and his team to evolve the music ecosystem into a richer, more beneficial experience for fans and a more rewarding outcome for artists and songwriters.”

“The most valuable innovations in the music business always bring artists and fans closer together,” adds Lucian Grainge, CEO of UMG. “That principle is at the heart of this pioneering AI-enabled superfan initiative, which is designed to support human artistry, deepen fan relationships, and create additional revenue opportunities for artists and songwriters. Building on our long track record of leading the industry through technology changes, and collaborating with Alex, Gustav, Daniel and the team at Spotify, this initiative is firmly artist-centric, rooted in responsible AI, and will drive growth for the entire ecosystem.”

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