Spotify and Universal Music Group have agreed to a deal that will allow customers to create covers and remixes of songs using artificial intelligence.
The licensing agreement marks the first time the Swedish streaming company will allow listeners to use AI to create content through its platform.
It is expected to be a paid add-on available on Spotify’s app. Premium users will be able to remix songs from participating artists and create AI-powered licensed covers. Spotify said the new tool could create an additional source of income for artists and songwriters on top of what they already earn through royalties.
The financial terms of the deal were unclear and the companies did not specify which artists would participate in the licensing deal. Universal Music is home to artists including Taylor Swift, Ariana Grande and Billie Eilish.
Spotify shares were up 16% on Thursday, with revenue expected to grow at a “mid-teens” annual rate and gross profit margins between 35% and 40% through 2030. According to FT.
“Solving hard problems for music is what Spotify does, and fan-made covers and remixes follow. What we’re building is based on consent, credit, and compensation for the artists and songwriters who participate,” said Spotify co-chief executive Alex Norstrom.
Universal Music chief executive Lucian Grainge said the deal aims to “support human artistry” and “create additional revenue opportunities for artists and songwriters”.
“Building on our long track record of leading the industry through technology transformations, and collaborating with Alex, Gustav, Daniel, and the team at Spotify, this initiative is strongly artist-centric, rooted in responsible AI, and will drive growth for the entire ecosystem,” he said.
Spotify is looking for new ways to move beyond traditional music subscriptions and adopt AI into its ecosystem.
In early May, she announced beta feature It also lets AI agents save and play “personal podcasts”, which would be a daily briefing, private to the user.
Artificial Intelligence is a serious concern for the music industry. Artists and songwriters are concerned about copyright issues and the place of AI-generated music in the industry landscape.
In late April, Spotify announced a new verification system to help users differentiate human artists and AI-generated content.
The audio-streaming service said its “Verified by Spotify” badge – marked by a green checkmark – will begin appearing in artist profiles and search results in the coming weeks. The badge means the music profile has been reviewed and meets the platform’s standards for authenticity.
“In the AI age, it is more important than ever to be able to trust the authenticity of the music you listen to,” the company said.
