14 Questions for the Music Business in 2026: AI, Live Nation, Spotify, UMG-Downtown & More

Copyright termination — a crucially important rule that allows songwriters and artists to take back their music rights decades after they sold them away — has only ever applied to the American market. But that could all change soon, thanks to a federal judge’s ruling last year that said a songwriter can recapture rights to his or her song “throughout the world.” Now up on appeal and set for a showdown in 2026, that case could mean big changes for the music business, giving musicians far more leverage to renegotiate their age-old deals. Experts said at the time that it would be a “major upheaval” that could “radically revolutionize the way the music business runs” — that is, if it’s upheld on appeal. We’ll find out next year. — Bill Donahue

Nashville prides itself as the home to songwriters, many of whom have lost their livelihoods over the past decade as streaming of individual songs rose and album sales plummeted. As AI-assisted artists like Breaking Rust and Cain Walker climb the country charts, the country songwriting and publishing community will have to figure out how to deal with AI in a way that doesn’t continue the bloodletting in the songwriting and demo-making process. — Melinda Newman

As 2025 draws to a close, the MLC lawsuit against Spotify over bundling is still up in the air, and more than likely, that suit will be resolved in 2026. In the meantime, Spotify is probably paying a reduced rate for its mechanical licensing, as its bundling of audiobooks with a music subscription means that one tier of the mechanical rate formula is impaired — to the tune of cutting the revenue base to about 52% of total subscription revenue, sources say. As any math student can tell you, if a rate is supposed to be 15.25% and the music subscription revenue is $100, then the publishers will get $15. But if only 52% of that $100 is ascribed to music, then the publishers would only get $7.80. That effectively knocks that percentage of the revenue bucket out of the running for determining the mechanical, leaving only the step that figures the mechanical rate by multiplying 26.2% against the amount Spotify pays to labels to determine the mechanical rate — a situation that resulted in this suit. — Ed Christman

The government’s investigation into how performance rights organizations (PROs) operate will likely conclude next year. That began due to a Notice of Inquiry that the Copyright Office opened after receiving a request from the Congressional Judiciary Committee to investigate how the U.S. performance rights societies operate. In November, the Copyright Office issued a report summarizing the comments it received from industry songwriters, publishers and other interested parties. And apparently, as a result of that report, Rep. Scott Fitzgerald, one of the three Congressmen who signed the initial letter that kicked off the Notice of Inquiry in the first place, is still not satisfied. On Dec. 8, he wrote a letter to the FTC, urging it to investigate possible “unfair or deceptive acts” by the newer PROs, AllTrack and Pro Music Rights. — Ed Christman

Next year, we’ll finally get some answers as to whether the government can really break up Live Nation and Ticketmaster. The Department of Justice’s landmark 2024 antitrust lawsuit claims the two companies have unlawfully cornered the live events business through a series of interlocking monopolies. Live Nation and Ticketmaster say this is false and that the industry is more competitive than ever.  

In early 2026, Judge Arun Subramanian in New York federal court will either dispose of the DOJ’s claims by granting Live Nation’s motion for summary judgment or allow the case to go to trial in March. If there is indeed a trial, it will end with a decision on whether Live Nation and Ticketmaster need to split up.  

The road ahead remains long, since whatever Judge Subramanian decides will likely be appealed. But it’s hard to overstate just how consequential it would be for Live Nation and Ticketmaster to be forced apart. Since merging in 2010, the combined companies have fundamentally shaped the contours of the live events industry by operating both the world’s largest promoter and its biggest ticketing company. Stay tuned to find out whether that will change. — Rachel Scharf

The end of 2025 saw landmark legal settlements between the major record labels and Suno and Udio, AI music generators that the big three accused of training on stolen work. UMG and Warner have now both struck licensing deals with Udio, and Warner settled with Suno. UMG is still litigating against Suno, while Sony has not laid down its swords in either case.  

We’ll find out in 2026 whether additional settlements will put the copyright infringement litigation to bed for good. If not, we’re likely headed towards a major court ruling next year on the big question of “fair use” — that is, whether Suno and Udio were permitted to train their models on unlicensed work because the usage was “transformative.” This is a legal quandary at the core of dozens of AI copyright cases across the country, and as of now, there’s no controlling court precedent providing clear guidance. 

Next year will also bring answers about how these record label settlements will affect the future of AI music. The deals are fundamentally reshaping both services: Udio in 2026 will become a “walled garden” where music can’t leave the platform, while Suno users will now have to pay to download their songs. Both settlements also require the AI companies to retrain only on licensed music from artists who opt in, meaning the models might look and sound quite different in the new year. — Rachel Scharf

Judging from Republicans’ indifference-verging-on-hostility to extending President Biden’s pandemic-era Affordable Care Act subsidies, it’s almost certain that health insurance costs will spike for most self-employed Americans — a group that includes a disproportionate number of indie musicians. They’ve been terrified about this for years: “If it wasn’t for the Affordable Care Act, I couldn’t work independently, and that would limit what I’m able to do with music,” Dan Binaei, a hardcore guitarist with Crohn’s Disease, told Billboard in 2020. The ACA, also known as Obamacare, has been among Republicans’ top political targets since it became law in 2010, and it’s unsurprising that the Trump Administration has no interest in rescuing this group of Americans from drastically more expensive health insurance. The question, beginning early in 2026, is whether they’ll take on extra jobs to receive employer-covered benefits, abandon music altogether or just go without health insurance. — Steve Knopper

The Christian/Gospel sector quietly flexed its own muscle in 2025, setting the stage for these under-covered genres to build even more success in 2026. According to Luminate, the sector rose 16.7% with 21.9 million in consumption units (including track-equivalent and streaming-equivalent albums), up from 18.8 million units in 2024. Christian/Gospel also racked up 27.3 billion on-demand audio streams compared to 22.9 billion in 2024 — an 18.9% boost. Among other 2025 signposts pointing up: successful tours featuring contemporary Christian artists. Acts planting their flags on the road with sold-out shows this year included Phil Wickham, Brandon Lake, Forrest Frank and MercyMe.

In a guest column earlier this year, music supervisor/producer Angela Jollivette spotlighted the “new mainstream” impact being fostered by faith-based/Christian hip-hop and R&B, aka Rhythm + Praise. Among those acts moving the needle beyond traditional radio into film, TV, sports and gaming are Lecrae, NF (whose EP Fear recently bowed at No. 4 on the Billboard 200) and newcomer Miles Minnick (the first Christian hip-hop artist to headline a stage at Rolling Loud Los Angeles). Not to mention the relaunch of storied Motown subsidiary Tamla as a faith-based hip-hop/Rhythm + Praise label, plus gamma.’s foray into the genre via a joint venture with Grammy-winning producer Rodney Jerkins’ Alienz Alive imprint. — Gail Mitchell

Ever since Universal Music Group (UMG) announced in December 2024 that its Virgin Music Group division had agreed to acquire Downtown Music for $775 million, the deal has come under a mountain of scrutiny, as indie music organizations and government entities dig into what effect it could have on the global music market. Most significantly, the European Commission (EC) in November released a statement of objections over the deal in its regulatory probe, with concerns that it could give UMG access to “commercially sensitive data” involving royalties from the indie labels that use some of Downtown’s services, which include royalty accounting platform Curve; distribution services FUGA and CD Baby; and publishing administration provider Songtrust, among others.

In December, UMG responded to the EC’s concerns, saying it was hopeful its response would clear the way for the deal to be approved on the continent in 2026. The timeline for what comes next will likely play out in the next year, meaning UMG’s distribution and services offerings could be greatly improved if everything goes through. On the other side, the indie trade bodies are saying competition could be hurt if one of the few remaining indie distribution companies comes under the purview of the world’s largest music company. — Dan Rys

Since co-founding Spotify in Sweden in 2006, Daniel Ek has served as the streaming service’s avatar as it has gone global and become the byword for music streaming. But in September, Ek relinquished his post as CEO for the role of executive chairman, handing the day-to-day reins over to Gustav Söderström and Alex Norström, who begin their new jobs as co-CEOs in January. Spotify downplayed the transition, saying that it merely formalizes a structure that had been in place for a few years — “I’ll remain deeply involved in shaping Spotify’s future,” Ek said at the time — but it still represents the biggest change in leadership in two decades for the company, and comes at a pivotal moment in the streaming environment.

Söderström and Norström will have to navigate a rapidly-changing business, the ongoing threat of AI slop flooding streaming services, finding a pricing sweet spot after a decade of stasis, the proliferation of offerings on the service and the seemingly-eternal quest for a super-premium tier — all while growing a global user base that currently numbers more than 700 million and pleasing shareholders who are starting to get used to a quarterly profit. — Dan Rys

This past year was the first in which AI-generated songs entered the Billboard, Spotify and TikTok charts. Xania Monet made headlines for her appearances on the Hot Gospel Songs and Adult R&B Airplay charts; Breaking Rust’s “Walk My Walk” got to the top of Digital Country Song Sales; “We Are Charlie Kirk” by Spalexma hit the top of the Spotify U.S. 50; and “A Million Colors” by Vinih Pray broke into the TikTok Viral 50. But don’t let the headlines fool you — AI-generated songs are still not that popular. 

As Sam Duboff, Spotify’s global head of marketing and policy, music business, said on Billboard’s On the Record podcast this fall, “I know it feels like it’s moving fast, but consumption of AI-generated music is insanely low.” French streaming service Deezer’s research paints an even clearer picture, estimating that up to 70% of streams on fully AI-generated tracks are actually fraudulent or artificial.

Still, it’s clear that there is momentum for AI songs, at least on some of Billboard’s more niche charts, and it would not be surprising if 2026 marked the year when the first true AI-generated hit song made its way onto the Billboard Hot 100 — and into the musical mainstream. — Kristin Robinson

The time has come, once again, to begin to review the current U.S. mechanical royalty rate, paid by streaming services to music publishers and songwriters before a group of judges, as these stakeholders do every five years. 

The current five-year period, called Phonorecords IV, for 2023-2027, was a rare instance of peaceful compromise between streamers and publishers. Don’t expect that to happen again for Phono V (2028-2032).

In spring 2024, Spotify found a way to start paying less to songwriters and publishers by reconfiguring its premium tiers to fit the Phonorecords IV definition of “bundles” — an exception that allows streamers to pay a heavily discounted rate to songwriters for special service offerings that bundle in music streaming with other products, like audiobooks or Amazon Prime. That move set off a new war between Spotify and the National Music Publishers’ Association (NMPA), which already had strained relations from the last time they negotiated the very long and tedious proceedings for Phono III. 

While many of the publishers have come to direct agreements with Spotify since then, signaling potential peace ahead, sources close to the matter say the NMPA is not ready to bury the hatchet on bundling and that the U.S. mechanical rates for Spotify premium streams are still lower than they were before. Phono V will begin at the start of January, and, as always, proceed through the last two years of the previous term. A decision is expected at the end of 2027. — Kristin Robinson

In 2025, venues locked in new levels of sustainability via the expansion of initiatives like reusable cup programs, which eradicated tons of plastic waste after being implemented at a grip of large-scale venues and festivals, like L.A.’s Crypto.com Arena and San Francisco festival Portola. Meanwhile, U.K. festivals Junction 2 and Paradise in the City wiped meat from their menus entirely, and Billie Eilish‘s team implemented a policy that every venue on her Hit Me Hard and Soft world tour had to sell at least one plant-based meal. 

These baby steps towards wider sustainability at venues happened where it mattered, given that a December report on the carbon footprint of live music in the U.S. and U.K. from MIT and others found that food and beverage is the second biggest carbon emitter in live, contributing to 16.9% of total live music related emissions in the U.S. and 7.6% in the U.K. — numbers driven largely by animal-based products. The report notes that “a shift toward plant-based menus could reduce these emissions by 40% or more.”

So in 2026, venues can take vital, ethically sound steps towards greater sustainability simply by using tools and insights that already exist. Those efforts can be ramped up even further with a focus on clean power and, for the truly ambitious, looking at ways to reduce carbon emissions related to fan travel to shows — the single biggest carbon emitter in live music. — Katie Bain

Music companies were busy raising billions from asset-backed securities in 2025, but a handful of them may get back to good old-fashioned sales in 2026. European regulators may force the sale of Curve Royalty Systems as a condition to approve Universal Music Group’s $775 million acquisition of Downtown Music, according to media reports. Private equity firm Francisco Partners is looking to unravel its portfolio of music companies, which includes majority stakes in Kobalt/AMRA, Native Instruments and Muse Group, sources tell Billboard. Catalog acquisitions continue to evolve as more financing options, like securitizations, become available. Warner Music Group and Bain Capital are expected to announce the acquisition of the Red Hot Chili Peppers’ catalog as the first major deal from their 6-month-old joint venture. — Elizabeth Dilts Marshall