Spotify and Universal Music Group have unveiled an agreement for a new feature that allows premium subscribers to make AI-generated covers and remixes of songs.
The new feature, which has yet to be released, was unveiled during Spotify’s Investor Day on Thursday, and is available to subscribers and only music from participating artists and songwriters. UMG and Spotify are touting this feature as a new revenue driver for music creators as they benefit from streams generated by fan-made content.
“Solving tough problems for music is what Spotify does, and fan-made songs and remixes are next,” Spotify co-CEO Alex Norstrom said in a statement. “What we build is based on approval, credit and compensation for participating artists and songwriters. Through every technology shift, we have worked with Sir Lucien [Grainge, CEO of UMG] and his team to evolve the music ecosystem into a richer, more rewarding experience for audiences and more satisfying outcomes for artists and songwriters.
Spotify did not share details about how the cover feature will work, or which artists will participate in the new feature, although Norström later added that the company welcomes all artists to participate in this. UMG is the world’s largest music company, and its roster of artists and songwriters includes Billie Eilish, Taylor Swift, Sabrina Carpenter, Post Malone and many more.
Spotify has not released details on how this will impact its finances, other than to say it will be “accretive.”
“We’ve created the first alternative here for fans to create remixes and covers,” Norstrom said during the investor presentation.
“It’s a largely untapped opportunity, because there’s really no clever way to make money from it, and what we did today is basically unlock that opportunity,” he added. “I think this will be beneficial for both artists, songwriters, the community at large, Spotify rights holders, etc.”
The feature is one of Spotify’s most significant AI developments to date and comes about seven months after the company announced that it had entered into agreements with all major record labels to develop AI music products. How Spotify handles AI content on the platform has been the subject of much debate as online listeners have expressed frustration with the slowdown of AI on streaming services. Spotify has not banned AI on its service, although the company introduced AI flags this year, and last year the company said it had removed 75 million unwanted songs.
For UMG, the licensing agreement with Spotify is the latest in its AI strategy. The company has previously struck AI deals with companies such as AI-powered music generator Udio, Splice, and Nvidia.
“The most valuable innovations in music always bring artists and fans closer together,” Grainge said in a statement. “This principle is at the heart of our groundbreaking AI-powered 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 technological change, and collaborating with Alex, Gustav, Daniel, and the Spotify team, this initiative is strongly artist-centric, rooted in responsible AI, and will drive growth for the entire ecosystem.”
– Caitlin Houston contributed to this report.
