Spotify licenses Merlin's independent record labels for its new AI cover tool

Spotify has signed a licensing deal with Merlin, the digital licensing body representing independent labels and distributors, covering its upcoming AI-powered fan-made covers and remixes tool, Music Business Worldwide reported on August 4. The tool will let fans create covers and remixes of songs by artists and songwriters at participating Merlin member labels, launching as a paid add-on for Spotify Premium.

The Merlin deal extends an arrangement Spotify first struck with Universal Music Group in May, when UMG became the tool's launch partner. Merlin represents independent labels across more than 70 countries and says its membership accounts for 15 percent of the global recorded music market; the agreement covers roughly 30,000 labels in its network, with participation opt-in at both the label and artist level.

"This agreement with Merlin ensures participating artists are credited and compensated, and that every creation drives listeners back to the original work," said Charlie Hellman, Spotify's SVP and Global Head of Music. Merlin CEO Charlie Lexton said the deal reflected Spotify's respect for its members' rights.

Music Business Worldwide reported a further expansion of the tool nine days later, when Spotify signed a licensing agreement with the publisher Kobalt, its first with a music publisher outside Universal. Warner Music Group, Sony Music and Believe had not announced their own deals for the tool as of that report. The AI push continued elsewhere on the platform too: Spotify has also said it will flag AI-generated artist identities and hold them out of recommendations by default.