Spotify has taken another major step towards launching its planned AI-powered covers and remixing platform.

The streaming service has signed a new licensing agreement with Merlin, allowing independent record labels and distributors represented by the organisation to make eligible music available for Spotify’s upcoming fan-made covers and remixes feature.

The agreement could significantly expand the catalogue available through the tool, bringing independent artists into a product that had previously been announced alongside Universal Music Group.

Spotify says the feature will allow fans to create new versions of songs from participating artists and songwriters while ensuring the original creators are credited and compensated. The tool will be offered as a paid add-on for Spotify Premium subscribers, creating a potential new source of revenue beyond traditional music streaming.

What have Spotify and Merlin announced?

Merlin is a digital licensing organisation representing hundreds of independent record labels and music distributors around the world.

Under the new agreement, artists whose recordings are delivered through labels covered by Merlin’s Spotify agreement may be given the option to participate in Spotify’s covers and remixing feature.

Participation is not expected to be automatic. Spotify and Merlin have both emphasised that artists and rightsholders will have a choice over whether their music is included.

This is particularly important because Spotify’s tool will use generative AI technology to help listeners create alternative versions of existing songs. Depending on how the final product works, that could potentially include new arrangements, different musical styles, remixes or fan-created interpretations.

Spotify says these creations will credit the participating artists, compensate the relevant creators and direct listeners back towards the original recording.

The exact royalty structure, licensing rates and revenue-sharing arrangements have not yet been disclosed.

What is Spotify’s AI covers and remixes tool?

Spotify first revealed more detailed plans for the feature in May 2026, when it announced recorded music and publishing agreements with Universal Music Group.

The company described the product as a generative AI tool that would let fans create licensed covers and remixes using music from participating artists and songwriters.

Instead of allowing users to generate unofficial versions through an external AI platform, Spotify appears to be building the creative tools directly into its own ecosystem.

The feature will be sold as an additional subscription on top of Spotify Premium. Revenue generated by the add-on is expected to provide another income stream for participating artists, songwriters and rightsholders.

Spotify has not yet publicly confirmed:

• The price of the add-on
• The official launch date
• Which countries will receive it first
• Which specific artists will participate
• How revenue will be divided
• Whether fans will be able to publish or share their creations
• What creative controls artists will receive
• Whether artists can approve particular uses individually

These details will determine whether the tool becomes a meaningful new music format or remains a relatively small experimental feature.

Why the Merlin agreement matters

The Universal Music Group deal gave Spotify access to music from the world’s largest major music company. The Merlin agreement extends the opportunity to a much broader section of the independent music market.

Merlin works with members in more than 70 countries and says its membership represents approximately 15% of the global recorded music market.

Its members include independent labels and music companies such as Domino, Epitaph, Ninja Tune, Sub Pop, Warp Records, Armada Music, Symphonic Distribution, Amuse and hundreds of others.

Independent music is therefore unlikely to be a small side category within the product. If enough Merlin members and their artists participate, independent recordings could become a substantial part of Spotify’s AI remix catalogue.

The agreement also provides Spotify with a more balanced offering. A creative platform containing only major-label music would have been considerably less representative of what listeners already stream through Spotify.

What could this mean for independent artists?

For participating independent artists, the feature could introduce several new commercial and promotional opportunities.

An additional revenue stream

Spotify says the paid add-on will generate new income for participating artists and songwriters.

The commercial value will ultimately depend on how much the feature costs, how many Premium subscribers pay for it and how Spotify distributes the resulting revenue.

It could potentially resemble a new form of music licensing rather than a standard per-stream royalty. However, Spotify has not yet revealed enough information to know how meaningful the payments will be.

Greater fan engagement

Fans already create unofficial edits, sped-up versions, mashups, remixes and covers across social media and user-generated content platforms.

Spotify’s product could bring some of this activity into a controlled and licensed environment.

A fan might, for example, create a dance remix of an acoustic track or reinterpret a pop song in another style. If those creations remain connected to the original artist, they could encourage listeners to explore the official release and the artist’s wider catalogue.

Spotify says every creation made through the tool will be designed to drive listeners back to the original work.

New discovery opportunities

Covers and remixes have regularly helped older songs return to popular culture or reach audiences outside their original genre.

Giving fans access to licensed creative tools could increase the number of ways a recording can be discovered.

A song that does not initially connect with one audience could potentially find another life through a fan-created interpretation. For independent artists without large promotional budgets, that possibility could be particularly valuable.

More control than unofficial AI platforms

One of the biggest concerns surrounding generative AI music has been the use of recordings, voices and creative identities without permission.

Spotify is attempting to differentiate its product by negotiating licensing agreements before launching it.

The company has repeatedly described its approach using three central principles: consent, credit and compensation.

Spotify has also said artists and rightsholders should be able to decide whether and how they participate in its generative AI products.

A properly licensed system would not eliminate every concern around AI music, but it would give artists more control than platforms that train models or generate music without securing permission first.

Important questions remain unanswered

Despite the potential benefits, the agreement will raise significant questions for artists and the wider music industry.

Artists will want to know how much control they retain over their voice, sound, image and creative identity.

A musician may be comfortable allowing instrumental remixes but object to AI-generated vocals. Others may want to approve the genres, prompts or types of transformations that can be applied to their recordings.

There will also be questions around attribution.

Spotify says participating artists and songwriters will be credited, but it has not explained how those credits will appear, who will be listed as the creator of a fan-made version or how ownership of the resulting recording will be handled.

Compensation will be another major issue.

A new revenue stream sounds positive, but artists will need transparency around how add-on revenue is calculated and distributed. Rightsholders will also want to understand whether payments are based on creations, listens, engagement, subscriptions or another measurement entirely.

The music industry will be watching closely to see whether this becomes a genuinely incremental source of income or simply shifts listener activity away from original recordings.

Spotify is building a controlled AI music ecosystem

The Merlin deal forms part of Spotify’s broader attempt to establish itself as a central platform for licensed AI music.

In October 2025, Spotify announced that it was working with Sony Music Group, Universal Music Group, Warner Music Group, Merlin and Believe to develop what it described as artist-first AI products.

The company said these products would be built through advance licensing agreements and would give artists a choice over participation while creating new revenue and fan-engagement opportunities.

At the same time, Spotify has been strengthening its policies against unauthorised vocal impersonation, misleading AI content and mass-produced music spam.

Spotify previously said it had removed more than 75 million spammy tracks over a 12-month period and introduced clearer rules stating that vocal impersonation is only permitted when authorised by the relevant artist.

Its strategy therefore appears to have two sides: restricting deceptive and unlicensed uses of AI while building licensed AI tools that Spotify can commercialise with the music industry.

A potentially important new format for music streaming

Spotify’s agreement with Merlin brings its covers and remixes product much closer to becoming a genuinely industry-wide platform.

The inclusion of independent labels is important. It means the future of fan-made AI music on Spotify may not be controlled entirely by major-label catalogues.

For artists, the most important factors will be choice, transparency and fair compensation. For fans, the appeal will depend on whether the tool provides enough creative freedom to justify paying an additional monthly fee.

Spotify has not yet announced when the feature will launch or how much it will cost. But the licensing agreements suggest that AI-powered creation is becoming a serious part of Spotify’s future product strategy rather than a small experiment.

The next major test will be whether Spotify can turn fan-made covers and remixes into a format that creates genuine value for listeners without weakening the rights, identity or income of the artists whose music makes the product possible.