Music – Part 3: Industry Pressures & What Comes Next

Introduction

AI-generated music has moved beyond novelty—it is now mainstream. AI “artists” have attracted substantial audiences and chart attention, and some have even secured record deals with major record companies. Chart organizations, streaming services, and labels are setting policies on classification, promotion, and payment for AI-generated tracks that continue to evolve as AI continues to permeate the music we consume. 

Beyond the creation of music itself, AI also presents opportunities to vastly improve how the music business operates, from royalty collection and rights administration to licensing and catalog development. This section examines how the industry has responded to AI and the operational applications that AI may have to benefit the various player.

How the industry is responding

AI-generated music has moved beyond novelty. AI “artists” have attracted substantial audiences and chart attention, and some, such as Xania Monet, have secured record deals. Human artists are also using AI to experiment with sounds and accelerate parts of their creative process.

The industry response has been mixed. Some artists fear unauthorized imitation and competition from AI-generated performers. Labels and publishers see both risks to their existing businesses and opportunities for new licensing revenue.

Chart organizations are drawing their own lines. The Australian Recording Industry Association’s rules exclude wholly AI-generated recordings, while qualifying music that uses AI in a supporting role remains eligible.

Streaming services are also taking different approaches. Deezer labels AI-generated tracks and excludes them from algorithmic recommendations. TIDAL accepts AI-generated music subject to its content standards but does not knowingly allocate royalties to tracks it identifies as wholly AI-generated. These policies are changing quickly, with no industry consensus on classification, promotion, or payment. Whether a recording is classified as AI-assisted or AI-generated can therefore affect its commercial prospects, independently of whether it infringes anyone’s rights.

Looking ahead

AI also presents substantial opportunities to improve how the music business operates. Usage, ownership, and payment information sits across contracts, royalty statements, and databases with inconsistent names, identifiers, and formats. Reconciling those records manually is costly, and smaller discrepancies may never justify the expense of investigation. The sums awaiting allocation are significant: In its 2025 Annual Royalty Recap, the Mechanical Licensing Collective reported approximately $328.2 million in unmatched and $260.5 million in unclaimed U.S. blanket mechanical royalties as of its February 2026 distribution.

AI could make reconciliation faster and more economical by recognizing connections across incomplete records and comparing them at scale. Combined with audio recognition, those capabilities could help connect reported uses to the correct recordings, compositions, and rightsholders, then compare payments with contractual terms. That could reduce unmatched and unallocated royalties, reveal registration gaps, catch underpayments, and accelerate distributions. Even modest improvements across large catalogs could produce meaningful recoveries and lower administration costs.

The opportunity extends to licensing and catalog development. Comparing detected uses with contractual permissions could support license monitoring and enforcement. Extracting rights, restrictions, and approval requirements from agreements could speed clearance. AI-assisted catalog search could match music to a licensee’s creative brief, surfacing repertoire that conventional searches might miss. These applications offer ways to collect income already due and generate new business, although reliable records and human review remain essential, particularly where rights are disputed.

The music industry has repeatedly adapted to changes in how music is created, distributed, and paid for. The challenge now is to establish workable rules that protect human creativity while allowing artists and their business partners to benefit from AI. If that balance can be struck, AI may become less of a threat and more of a tool for the industry’s next chapter.