Spotify, Universal Music AI covers deal

Spotify and Universal Music Group said on May 21 they signed recorded-music and publishing licensing agreements that will let Spotify launch a tool for AI-generated covers and remixes inside its app. The feature is aimed at Spotify Premium subscribers and will be offered as a paid add-on, according to statements from both companies. Reuters reported the deal marks the first time Spotify will allow users to create AI content directly on its platform. (newsroom.spotify.com) The agreement puts Spotify deeper into a part of the music business that has been defined by disputes over unlicensed AI training and artist consent. (newsroom.spotify.com) This time, Spotify and UMG are framing the product as licensed and opt-in, with only participating artists and songwriters included. Both companies said artists and songwriters whose work is used will receive earnings on top of existing Spotify royalties. ### Who gets to use the new tool, and what will they be able to make? Spotify said the product will be limited to Premium subscribers, and access will require a paid upgrade beyond a standard Premium plan. (newsroom.spotify.com) The companies said users will be able to create covers and remixes of songs from participating artists and songwriters. TechCrunch reported Spotify did not disclose pricing or a launch date. Spotify’s own announcement described the product as a “paid add-on” and said created tracks will be playable by all Spotify users, not only the people who make them. (newsroom.spotify.com) ### How is Spotify trying to answer the music industry’s AI concerns? Universal Music Group and Spotify described the product as a “responsible” AI offering built through licensing agreements that cover both recorded music and music publishing. That matters because most fights over AI music have centered on whether platforms used copyrighted songs without permission or compensation. (newsroom.spotify.com) Spotify said the tool will only use songs from participating artists and songwriters. Reuters said participating artists will share in the revenue, while company statements said the feature is intended to create an additional revenue stream beyond ordinary streaming royalties. (techcrunch.com) ### Why did investors focus on the announcement? CNBC reported Spotify shares rose 13% on May 21 after the company presented new long-term targets at investor day and announced the UMG AI deal. Spotify held the event in New York and used it to outline its product strategy, including AI, audiobooks and ticketing. (variety.com) Spotify’s investor-day recap said co-CEOs Alex Norström and Gustav Söderström presented the company’s long-term vision during its first investor day under their leadership. Reuters said Spotify also updated revenue guidance after the AI music announcement. (msn.com) ### Which artists are covered, and what has not been disclosed yet? Universal Music Group’s roster includes artists such as Taylor Swift, Ariana Grande, Drake and Billie Eilish, Reuters reported, but the companies did not identify which artists or songwriters will participate in the tool at launch. They also did not disclose financial terms of the licensing agreements. (cnbc.com) May 21 is the only date attached so far to the agreement itself. The next concrete step is Spotify’s launch of the paid add-on for Premium users, and the company has not yet provided a price or release date. (newsroom.spotify.com) (finance.yahoo.com) (newsroom.spotify.com)