**MBW Explains: Spotify’s Ambitious Push into Responsible AI Music Products**
*By Music Business Worldwide*
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**MBW Explains** is a series of analytical features where we explore the context behind major music industry talking points and suggest what might happen next. Exclusive, unlimited access to these articles is available only to MBW+ subscribers. This series is supported by Reservoir.
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On Thursday, October 16, Spotify announced plans to develop “responsible” AI music products in partnership with all three major music companies, as well as key independents Merlin and Believe. The streaming giant said it is “making significant investments in AI research and product development” and has already started building a “state-of-the-art” generative AI research lab and product team.
Spotify aims to onboard additional rightsholders and distributors over time.
This announcement comes just over two weeks after the company unveiled a suite of new policies for managing AI-generated content on its platform. This was part of a crackdown that led to the deletion of 75 million “spammy” tracks over the past year.
Meanwhile, rival Deezer revealed in September that fully AI-generated music now makes up 28% of all tracks delivered to its platform daily — that equates to over 30,000 AI-generated tracks each day.
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### Spotify’s Four Key AI Principles
According to Spotify, all products developed through its new collaboration with major and indie rightsholders will “put artists and songwriters first” through four key principles:
– Partnerships with record labels, distributors, and music publishers
– Choice in participation
– Fair compensation and new revenue
– Artist-fan connection
While Spotify’s announcement emphasized artist protection and responsible AI development, several elements suggest the company may be laying the groundwork for new revenue streams — potentially linked to rumored superfan tiers and higher-priced subscription offerings.
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### Three Things You Might Have Missed About Spotify’s AI Announcement
#### 1. Spotify Promises “Wholly New Revenue Streams” — Not Just Incremental Improvements
When discussing fair compensation, Spotify made a specific commitment that goes beyond simply protecting existing revenue models.
> “We will build products that create wholly new revenue streams for rightsholders, artists, and songwriters, ensuring they are properly compensated for uses of their work and transparently credited for their contributions,” the company stated twice for emphasis.
The focus on “wholly new revenue streams” rather than incremental improvements to streaming royalties suggests Spotify is developing AI-powered features that could generate fresh income beyond the traditional per-stream payment model.
This aligns with recent reports about a higher-priced “super-premium” or “Music Pro” subscription tier. While Spotify has introduced Premium upgrades like a playlist mixing tool and lossless audio, these have not yet been part of a rumored higher-priced tier.
Spotify also recently launched a direct messaging feature for both Free and Premium users.
The unspecified AI-powered products in development could be gated behind a higher-priced subscription, or offered with one-off purchase or recurring subscription fees.
Looking at how Spotify monetizes other audio formats gives clues about potential revenue models. For example, the platform allows podcast creators to offer exclusive episodes available only to paid subscribers — which are locked with a distinct icon in the app.
#### 2. The Focus on “Artist-Fan Connection” Could Point to Interactive Features
Spotify’s fourth principle centers on deepening relationships between creators and listeners through AI.
> “AI tools we develop will not replace human artistry,” Spotify said. “They will give artists new ways to be creative and connect with fans. We will leverage our role as the place where more than 700 million people already come to listen to music every month to ensure that generative AI deepens artist-fan connections.”
The emphasis on connection and creativity — rather than just consumption — indicates Spotify may be exploring interactive AI features designed to appeal to superfans willing to pay more for enhanced engagement with their favorite artists.
Goldman Sachs highlighted superfan monetization as a major opportunity for the music industry in its June 3 *Music in the Air* report, estimating a potential $4.3 billion annual revenue uplift by 2026.
In China, Tencent Music Entertainment’s Super VIP tier — costing roughly 2.5 times the standard premium subscription — offers insight into how platforms are monetizing superfans through tiered features. Tencent’s Super VIP subscribers surpassed 15 million in Q2 2025, growing significantly from 10 million in Q3 2024.
#### 3. Major Labels’ Immediate Endorsements Suggest Commercial Terms Are Already in Place
The swift and enthusiastic endorsements from major and key independent music companies following Spotify’s announcement are notable.
All three major labels issued statements the same day, with language hinting that substantive commercial discussions have already occurred.
Rob Stringer, Chairman of Sony Music Group, said:
> “This is an acknowledgement that direct licensing in advance of launching new products is the only appropriate way to build them and demonstrates how a properly functioning market benefits everyone in the ecosystem and fuels innovation. We appreciate and applaud Spotify’s leadership at this critical period.”
Sir Lucian Grainge, Chairman and CEO of Universal Music Group, remarked:
> “It is essential that we work with strategic partners such as Spotify to enable Gen AI products within a thriving commercial landscape in which artists, songwriters, fans, music companies and technology companies can all flourish.”
Warner Music Group CEO Robert Kyncl added:
> “We’ve been consistently focused on making sure AI works for artists and songwriters, not against them. That means collaborating with partners who understand the necessity for new AI licensing deals that protect and compensate rightsholders and the creative community.”
Spotify’s Co-President and Chief Product and Technology Officer Gustav Söderström said:
> “AI is the most consequential technology shift since the smartphone, and it’s already reshaping how music is created and experienced. At Spotify, we want to build this future hand in hand with the music industry, guided by clear principles and deep respect for creators, just as we did in the days of piracy.”
The coordinated messaging and licensing language suggest commercial frameworks are already being negotiated or established. This potentially includes how revenue from AI-powered features would be shared between Spotify and rightsholders.
Spotify emphasized:
> “We will develop new products for artists and fans through upfront agreements, not by asking for forgiveness later.”
> “Artists and rightsholders will choose if and how to participate to ensure the use of AI tools aligns with the values of the people behind the music.”
With major labels now publicly supporting Spotify’s AI strategy and underscoring the importance of upfront licensing agreements, Spotify appears to have cleared a critical hurdle toward launching new AI-powered features that may form part of higher-priced subscription offerings.
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**Conclusion**
Spotify’s entrance into AI-generated music products — with strong industry partnerships and clear focus on artist rights and new revenue channels — signals a major evolution in how music could be created, experienced, and monetized in the near future.
As the company expands its AI research team and develops new tools, the streaming landscape is poised for transformation aimed at empowering creators while enhancing fan engagement.
Stay tuned for more insights as MBW continues to monitor developments in AI and the music industry.
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*Music Business Worldwide*
https://www.musicbusinessworldwide.com/3-things-you-might-have-missed-about-spotifys-ai-product-plans/
