The record labels spent the last three years treating AI music as a crime. Now they're licensing it as a product.
Spotify plans to launch an AI-powered covers-and-remixes tool in the first quarter of 2027, with an unveiling targeted around the Grammy Awards in February, according to Reuters, reporting on the Financial Times' exclusive. The tool would let paying subscribers make their own versions of songs — reworking a folk track as dance music, say, or generating a version that sounds like a different artist covering it — and Spotify is weighing an extra $4 to $5 a month for it, on top of the subscription. Spotify declined to comment.
The deal structure is the story. Universal Music Group, Merlin, Kobalt, and Believe have already licensed their catalogs — UMG signed first, at Spotify's Investor Day in May; Merlin followed in August; Believe joined on October 20 — while Sony Music and Warner Music Group are still negotiating. Artists opt in individually even when their label has licensed the catalog, Music Business Worldwide reports, and co-CEO Gustav Söderström said in September that the company doesn't need every major signed before launch: "We would like to have as many artists as possible, obviously, but we don't expect to have all artists."
The royalties architecture is what turns this from a gimmick into a business model. Fan-made remixes pay the original artists, and remixes can be added to playlists with their plays credited to the original tracks on Spotify's charts. Spotify and Believe say the tool is "designed specifically for AI-powered remixes and covers, not entirely new works" — a deliberate wall between this and text-to-song generators like Suno.
Söderström's pitch is aimed squarely at the back catalog. "If you are an artist today, from the 1980s or 1990s, the way that you would make more money today is to hope that some other artist would create a remix or cover of your song," he said. "Now you can hope that all your fans actually create remixes and covers of your songs." Bernstein estimates 7% to 8% of US subscribers could sign up by the end of 2028 — which, on a base of 306 million Premium subscribers, starts to look like real money.
Not everyone is buying the pitch. UMG-signed Olivia Rodrigo told The Hollywood Reporter this month: "I would never use AI in any of my music," calling it a "hard line." One person told the FT that today's major stars have been harder to sign up than some veteran acts — which is exactly why the opt-in structure matters.
This slots into Spotify's broader superfan monetization push — the same Investor Day that introduced Reserved ticketing — and echoes a February 2025 Bloomberg report that Spotify was considering charging up to $5.99 a month on top of Premium for a "Music Pro" tier with AI remix features. The remixes have finally found their tier.
What to watch: whether Sony and Warner close before the Q1 launch — a remix tool with holes in its catalog teaches users to go elsewhere — and whether fans will actually pay $5 a month for something YouTube and TikTok keep giving away for free.
— via Financial Times