Photo Credit: Spotify
Another day, another high-profile AI licensing deal – this time between Spotify and Kobalt, which is officially set to participate in the streaming platform’s forthcoming AI-powered remix and cover tool.
The involved companies confirmed their agreement today, hot on the heels of the BMG-Suno partnership reveal. In general, the recent influx of significant AI tie-ups hasn’t been accompanied by in-depth announcements; we’ll presumably learn more about the pacts as the corresponding products take shape.
Keeping the trend going, the brass-tacks Kobalt-Spotify release spans only 229 words, most of which are attributable to statements. Moreover, broad partnership information – “participating songwriters” will receive a piece of the appropriate add-on revenue – is front and center in the document.
Absent from the text is any mention of Primary Wave; its Kobalt subsidiary has seemingly entered the deal as a standalone division. Similarly, the release doesn’t contain specifics about the copyrights at hand, with the goal likely being to open the door for interested songwriters and rightsholders to opt in.
In any event, the licensing agreement is certainly good news for Spotify, which also counts as remix-tool participants Universal Music and Merlin.
Of course, the conspicuous absence of the other two majors stands out here – especially because Spotify execs during their company’s Q2 earnings call underscored that all three majors needn’t be onboard for the product to launch.
Subsequently, Warner Music Group (WMG) head Robert Kyncl, whose criticism of “AI resistance” is hardly a secret, beat around the bush when asked about the status of his business’s Spotify licensing talks.
Given WMG’s tall expectations for its Suno agreement, are revenue concerns factoring into the situation? Perhaps. Suno reportedly has millions of paid subs, while Spotify, massive reach aside, is facing the potentially difficult task of finding AI add-on takers in established markets where price bumps aren’t exactly infrequent.
But that’s a longer-term challenge, and at present, there’s no way to tell where the usership cards will fall as Suno, Udio, Klay Vision Spotify, and others yet battle for market share.
More immediately, Spotify global head of music Charlie Hellman emphasized that the plan is to keep on adding remix and cover tool partners.
“Covers and remixes begin with the song, which makes music publishers and songwriters essential partners in building this tool the right way,” said Hellman. “This agreement with Kobalt is grounded in consent, credit, and compensation for the songwriters who take part, and every creation drives listeners back to the original song. We look forward to welcoming more partners as we continue to build.”
And on the opposite side of the pact, Kobalt CEO Laurent Hubert – whose company’s multiyear Spotify direct deal has taken on additional importance in light of today’s announcement – pointed to the tool’s perceived ability to drive “unprecedented” fan connections and revenue alike.
“Fans have always sought deeper engagement with the songs they love, whether through listening or creating their own covers and remixes. Spotify’s new AI-powered creative tools are built on a foundation of ethical training, fair compensation, and intentional guardrails.
“This agreement is designed to ensure our songwriters can connect with their audience in unprecedented ways, while directly benefiting from the creative opportunities these new features provide, concluded Hubert.