Spotify and Universal Music Group Partner for AI-Generated Song Covers and Remixes

Spotify and Universal Music Group have agreed on a deal that will allow subscribers to generate song covers and remixes using artificial intelligence.

The licensing agreement is the first time the Swedish streaming company will allow listeners to use AI to create content through its platform.

It is expected to be in the form of a paid add-on available on Spotify’s app. Premium users will be able to remix songs from participating artists and create AI-driven licensed covers. Spotify said the new tool could create an extra stream of income for artists and songwriters, in addition to what they already earn through royalties.

The financial terms of the deal were unclear, and the companies did not reveal which artists would participate in the licensing deal. Universal Music is home to artists including Taylor Swift, Ariana Grande and Billie Eilish.

Spotify’s shares were up 16% on Thursday, with revenue expected to grow at a “mid-teens” annual rate and gross profit margins to reach between 35% and 40% through to 2030, according to the FT.

“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,” said Spotify co-chief executive Alex Norström.

Universal Music’s chief executive, Lucian Grainge, said the deal seeks 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 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,” he said.

Spotify is looking for new ways to epand beyond the traditional music subscription and to adopt AI into its ecosystem.

At the start of May, it announced a beta feature that lets AI agents save and play “personal podcasts”, which will be a daily briefing, private to the user.

Artificial intelligence is a pressing concern for the music industry. Artists and songwriters are concerned about copyright problems and the place of AI-generated music in the industry landscape.

At the end of April, Spotify announced a new verification system to help users differentiate between human artists and AI-generated content.

The audio-streaming service said its Verified by Spotify badge – marked by a green checkmark – will begin appearing on artist profiles and in search results in the coming weeks. The badge means a music profile has been reviewed and meets the platform’s standards for authenticity.