Music Industry Grapples with AI Licensing and Streaming Revenue Gaps

The music business continues to grow its recorded‑music revenues, but industry leaders argue that the streaming model has created a structural mismatch between how fans are valued and how royalties are paid. Streaming platforms treat occasional listeners and superfans alike, diluting the value of intense fan engagement and allowing AI‑generated tracks to flood the catalog, which depresses the overall royalty pool.

ABBA co‑founder and CISAC president Björn Ulvaeus warned that the sector faces a "fork in the road" over upcoming AI‑music licensing cases. He said, “Human creativity is not just expression. It is testimony. A life lived.” The outcome of lawsuits such as GEMA v. Suno and a US Suno fair‑use case could determine whether licensing deals for AI‑generated music collapse or become the default legal framework.

Authors of the MBW Views series also noted that past speculation about a $64 billion bid for Universal Music Group rested on assumptions of continued streaming growth and operational leverage. While revenues have risen, the underlying model prioritises volume over depth of fan connection, leaving the industry vulnerable to future disruptions.