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The music industry faces unprecedented disruption... again.
First, starting in the late 1990s with file sharing services, peer-to-peer piracy, the unbundling of the album, and the decline both of physical media and physical retail stores—and then in the 2010s, with Spotify and streaming platforms' "all-you-can-eat" offerings, which replaced purchases and collections. The next tectonic business shift is upon us, driven by the direct-to-consumer creator economy and their disintermediation of traditional music companies.
Artificial intelligence (AI) and its vast creative and publishing capabilities are further enabling independent and direct distribution but are also creating opportunities for established companies to drive transformation, operational strength, and profitability.
The advantage the music industry leaders today have is their tremendous resources to test, invest, and capture artificial intelligence and machine learning (ML)-assisted benefits in ways impossible even just a few quarters ago.
This paper will outline trends impacting the economics of the music industry today and provide a view of key actions the major labels and publishers can take, from foundational readiness to implementing AI-enabled vision, strategy, and efficiency, in order to position them to benefit from these seismic industry trends.
Areas of Opportunity in Music
Foundational Readiness
Getting the "house in order" to streamline operations and lay the necessary foundations for competitiveness, AI, and automation
Visionary Integrations
Rethinking AI-fueled business models, content sources, value chains, audience relationships, and partner ecosystems
Strategic Integrations
Optimizing data insights, finer marketing, and audience-building for new AI-enabled trendspotting and strategic IP exploitation
Efficiency Integrations
Driving cost-savings and speed-to-market benefits with AI tools across the business
Companies that run toward their data strategy with thoughtfulness and disciple, rather than deferring it, will gain competitive advantage and, likely, outsized returns.
Key Trends and a Changing Landscape
Market developments have changed how music companies launch content, brands, and ecosystems. When companies look at the imperatives for success for the coming AI era—from visionary to foundational—they must address the larger context and challenges facing the wider industry.
Data Challenges and Opportunities
Long gone are the days of relatively limited data sets, consisting primarily of physical album retail sales, radio play, and chart rankings. Coupled with legacy metrics are now the vast troves of new data, the volume of which is almost unimaginable. Synchtank reported in 2021 that data created and processed by music labels and publishers had grown by 4,500% over the previous decade.1 This includes millions, sometimes tens of millions, of daily data points from social media, streaming, radio, and retail, as well as performance tracking across millions of assets, albums, and songs from artists.
Creating a real-time view remains a considerable challenge across first- and third-party data sets, the various and proliferating social channels, as well as aggregated global platforms. In the era ahead, the companies that run toward their data strategy with thoughtfulness and disciple, rather than deferring it, will gain competitive advantage and, likely, outsized returns.
Legacy Systems
The music industry has consolidated over time and through a myriad of acquisitions, creating a complex web of often fragmented software, platforms, and legacy systems. Traditionally, many of the necessary workflows from editing to IP management have been disjointed and inefficient, and home-grown systems have struggled to keep pace. Persistent manual processes and paper-based workflows further slow operations and limit scalability.
Whether addressing interoperability across systems or outright modernization of fundamental solutions like royalty management or CRM, the time is now to fortify the building blocks upon which AI and ML will operate. The transition from patchwork legacy systems to AI-enhanced systems and workflows will define the next era of efficiency and innovation in music.
Indie and Technology M&A
In tandem with the rise of the creator economy has been the rise of independent labels. In fact, MIDiA reported that "non-major" labels and self-releasing artists expanded market share to 29.7% in 2024.2 Further, Chartmetric reports that in 2024 artists that were self-published, independent, or on small labels accounted for 41% of the top 1,000 top artists, versus 13% five years ago.3 Artists like Connor Price, with his "DIY approach" and "Spin the Globe" popular collaborations, are choosing to stay independent4 —while others like Jelly Roll built up significant bargaining power as an independent artist to negotiate favorable terms with partners.5
In response, major labels and publishers have honed M&A on indie labels and their emerging talent. Examples of recent acquisitions by the Big Three (UMG, SMG, WMG) include [PIAS] Group, Downtown Music Holding, Supraphon, and Tempo Music Holdings, to name a few. While this is not a new phenomenon, the pace of new labels and their acquisitions by the majors have significantly increased with the thriving creator economy.
Further M&A activity has focused on building capabilities and modernizing systems in the emerging AI era. Major players are focusing more and more on technology-driven M&A for architecture, data analytics, automation, AI talent, and market extensions/adjacencies. For example, WMG invested in AI music generator Lifescore, avatar-led digital fashion company DRESSX, and an AI-enabled gaming platform Roblox. Likewise, SMG invested in the music creation platform Tully, the social platform Fave, and a mentorship and funding program for emerging talent called Techstars Music.6
In using M&A as a lever to protect and grow the capabilities with these industry-disrupting technologies, it is crucial that there is targeted focus, along with post-merger discipline to speed and smooth each M&A journey.
PE has its own playbook on profitextraction, something the Majors would do well to consider moving forward
PE and Profit Focus
Like the Majors' M&A push, private equity has been moving at a record-breaking pace. In addition to deals with landmark music catalogs, many in the PE community have been investing in AIenabled music workflow, royalty management, and other technology companies such as LANDR (AI mastering), Native Instruments (virtual studio software and hardware), and Splice (AI search and tools).7 Others, like Providence Partners, are making placements across all facets of the industry, from live music and mega-tours for superstars (Global Critical Logistics) to venue operations (ATG Entertainment) and musical instrumentation (Sweetwater).8
PE has its own playbook on profit-extraction, something the Majors would do well to consider moving forward. In uncertain circumstances, it is paramount to make the most of acquisitions— rather than keeping them standalone or siloed.
Blockchain Early Days
With the proliferation of digital streaming and social media platforms, reconciling and managing rights has become exponentially more complex and costly. Ledger-based blockchain can play a key role in the future of IP and royalty management. Platforms like Ujo Music and Revelator use blockchain to register IP rights immutably, reducing downstream disputes and creating a single source of truth within their closed ecosystem. Upstarts without legacy system constraints will continue to integrate blockchain more fully than players with mature installed bases of IP management, royalty management, CRM, and other key solutions. Yet, as the technology moves from newcomers to more mainstream, it may be worth outlining incremental and pilot use cases for even the most established industry players.
Footnotes
1 Emma Griffiths, "Drowning in Data," Synchtank, April 6, 2021.
2 Andre Paine, "MIDiA Research: Global music growth slows in 2024 with streaming's share of revenue actually dipping,", Music Week, March 13, 2025.
3 Sonia Chien, "What Does "Indie Music" Even Mean in 2025," Chartmetric, October 9, 2025.
4 Richard Trapinski, "How Connor Price Built a Global Following of Millions with His Friends & Family," Billboard Canada, May 12, 2025.
5 "Jelly Roll Explains How Record Labels Continue To Rob Upcoming Artists Of Their Money," YouTube, n.d., accessed October 15, 2025.
6 Kristin Robinson, "Music Tech Investors: The Top Names Putting Money Behind AI, VR & More," Billboard, October 20, 2023.
7 Kristin Robinson, "From AI to VR, These Are Music's Top Investors In Tech Of The Future," Billboard, October 20, 2023.
8 Murray Stassen, "Private Equity's thirst for the live business continues, as Providence strikes $1bn+ deal for event logistics firm that worked on Taylor Swift tour," Music Business Worldwide, May 27, 2025.
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Originally published on 11 November, 2025
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