The dramatic arrival of artificial intelligence is disrupting the music industry, affecting authors, platforms, and labels. This technological revolution offers new creative opportunities but poses significant economic risks to the value chain, starting with the creator. With composers’ revenues projected to drop by 24% by 2028, the substitution effect and the loss of royalties are major concerns. Streaming platforms, for their part, are facing transparency and credibility challenges in the face of the proliferation of AI-generated music, which replicates musical models by drawing from an ocean of existing songs.Episode 5/5: The Revolutionary Impact of Artificial Intelligence on the Music Industry In this final episode, we explore how artificial intelligence (AI) is transforming the music industry. This shift affects everyone in the industry, from content creators to streaming platforms, and could redefine existing business models. We will examine the opportunity AI represents for music creation and the economic challenges it poses, as well as its influence on copyright and streaming platforms. Creation Under the Influence of Artificial Intelligence The rise of AI in the music industry offers new opportunities for creation. Composers can now use these technologies to generate unique and diverse sounds. However, the massive arrival of AI-generated music also raises the question of the substitution effect. It could encroach on the existing market, directly impacting the revenues of traditional artists. It is estimated that, as early as 2028, these artists could see a 24% reduction in their revenues due to this competition, as indicated by a study commissioned by CISAC. Economic Challenges and Copyright Copyright issues are proving particularly complex with the development of AI-generated music. Currently, artists do not receive royalties from the reuse of their music by AI systems, even though these systems draw from vast existing catalogs. This raises concerns about the transparency and traceability of musical works. European regulations have been adopted to address these concerns, and in France, the Senate’s Culture Committee is actively addressing the issue. The Impact on Streaming Platforms Streaming platforms are also impacted by the AI ​​revolution. With the increase in artificial intelligence-generated music on their platforms, reputational issues arise. An excess of AI content could undermine user trust, which could harm subscriptions—the main source of revenue for these companies. Recent figures show that in January, 10% of songs on Deezer were AI-generated, and this has recently risen to 18%. Functional Music and Passive ListeningThe integration of AI music appears particularly interesting for so-called « functional » music. Usually found in ambient playlists, this music appeals to a more passive listening style. Thus, while popular artists like Taylor Swift won’t be immediately replaced, it is in these niches that AI is making a profound impact, multiplying the range of generated music across a wide spectrum.

The Industry’s Winners and Losers

In any industrial revolution, there are always winners and losers. In this case, artificial intelligence providers are seeing their revenues potentially soar thanks to the growth in generated music. In 2023, these companies generated approximately €100 million, and projections for 2028 predict revenues reaching €4 billion. The music industry’s value chain, meanwhile, is being disrupted, with a notable impact on labels and the budgets allocated to traditional creation.