Key Areas of Growth in Music Publishing

Photo by Andrew Solok

The music publishing industry is no stranger to disruption. Every year seems to bring a new wave of technological, economic, or cultural change that evolves how music is consumed, and subsequently licensed and monetised. Keeping a keen eye on the data for areas of potential growth provides rights holders with a super power. Seeing what opportunities are developing, at what rate, and what the uplift is likely to look like as the revenue converts down the pipeline- particularly if generated from sources they have no direct relationship with.

Artificial intelligence, streaming, and user-generated content are each continually reshaping revenue opportunities in distinct ways. None of them is entirely within the control of publishers, yet each offers an opportunity to capture value when approached strategically. Significantly they also highlight the increasing importance of data in positioning publishers to benefit from changes outside their direct control.

1. AI: From Disruption to Licensing Opportunity

Generative AI has dominated headlines across the music industry for the last 18 months. The conversation swinging between existential threats and cautious optimism. What is becoming clear is that publishers and rights holders are beginning to shape the terms of engagement.

The most striking evidence came earlier this month, with Kobalt debuting a new licensing deal with ElevenLabs, a generative AI company best known for its synthetic voice technology. The agreement follows ongoing discussions between the majors and Suno et al., and it set a new benchmark by introducing “most favoured nation” provisions to ensure Kobalt and its clients receive parity with terms given to any other publisher.

This is a crucial moment for publishing, demonstrating the industry is moving beyond reacting to AI towards proactively setting frameworks for licensing- as we’ve previously explored. Just as streaming was once the Wild West of unlicensed platforms before evolving into a mature revenue channel, generative AI is on the same path. Publishers that are forward-thinking enough to strike deals early, while also shaping the standards of transparency and remuneration, will be well placed to capture long-term value.

There is also the obvious data angle. Unlike traditional licensing, which is linked to relatively well-understood usage models, generative AI presents an entirely new set of consumption behaviours. How do we measure the value of a song that influenced an AI training set? What is the worth of synthetic outputs that sound like a composition but are not one-to-one reproductions? These questions cannot be answered overnight, but they reinforce why publishers need strong internal data capabilities. The ability to analyse licensing deals, benchmark usage patterns, and understand how catalogs are being deployed in machine learning environments will become a competitive differentiator.

AI is not just another revenue stream to bolt on, but a new paradigm. Publishers who treat it that way will be better positioned as the market matures. It can be maximised by those who are able to wade through and interpret usage data, and have a keen and granular catalog management system to leverage in providing data to companies they’re licensing.

2. Streaming: Mature, Emerging, and Direct

Streaming remains the engine room of music revenues, but its contours are changing. In mature markets like North America and Western Europe growth has slowed. Subscription penetration is reaching its ceiling, and incremental revenue gains are harder to come by. At the same time emerging markets in Asia, Africa, and Latin America continue to expand, often with very different economic and cultural dynamics.

This divergence creates both challenges and opportunities. In the US (as a mature, and arguably saturated, market) the battleground is set by the Copyright Royalty Board (CRB) rulings, which have demonstrated how contentious licensing negotiations can be. Publishers have fought hard to secure better rates, but each ruling has also underscored the complexity of balancing the interests of all stakeholders. The outcome of future CRB processes will continue to have significant ripple effects across the industry- particularly given the ‘bundling’ drama of the most recent ruling.

In emerging markets the question is not about squeezing incremental percentages out of established subscription models, but about how publishers can build structures to capture value in economies where average revenue per user is lower, payment systems are less mature, and cultural consumption patterns differ. These markets may not deliver the same immediate headline numbers as North America or Europe, but over the long term they represent higher marginal growth potential.

One of the most interesting developments in streaming, however, is the rise of so-called ‘direct deals’ between publishers and platforms. UMPG, Warner Chappell, and Kobalt have all touted new arrangements handled directly with DSPs rather than relying exclusively on collective frameworks. This shift mirrors earlier moves on the recorded music side, and reflects publishers’ growing ability to leverage their catalogs more strategically.

The long-term impact of direct deals (and how they mechanically function) is still to be seen, but the trend is clear- and is likely to waterfall further down the industry. I predict this will end up maturing to mirror the recorded side, with more parties having direct access to platforms- which will also mean more access to data. 

As publishers take greater control over their digital rights, they will need stronger internal infrastructure for managing these new licensing models and the accompanying data. Direct deals increase the administrative burden, but they also give publishers more up-to-date insight into usage and trends. Those who can scale the complexity stand to benefit most.

Streaming may no longer be the “new” frontier, but as with the wider industry it is still the bedrock of publishing economics. The shape of its next chapter can be determined by how publishers navigate maturity in established territories, capture growth in emerging ones, and build capacity to handle the mountains of more readily available data.

3. UGC: The Still Being Tapped Billion-Dollar Opportunity

While AI and streaming dominate industry headlines, UGC continues to be central to how audiences engage with music- from TikTok dances to YouTube shorts to Instagram reels. Yet its revenue potential for publishers is still only beginning to be realised.

A recent Warner Music financial filing reveals that global short-form video and social media content generated over $1 billion in revenue in 2023 alone. 76% of U.S. music listeners watched short-form video content that year, and 22% posted to these platforms themselves. These stats signal not just engagement, but monetisable attention.

What makes UGC especially compelling is that it sits outside the traditional structures of streaming or sync. It is not governed by collective licensing frameworks in quite the same way and is heavily reliant on technology and data to identify/monetise. UGC is also driven by culture, virality, and creator behaviour. That makes it harder to forecast, but it also creates huge upside for publishers who are able to track the right signals.

The signals, of course, lie in the data. Engagement metrics such as plays, likes, shares, and creator adoption are leading indicators of where value will emerge. A song that goes viral on TikTok may not generate immediate streaming revenue, but it creates a powerful long-tail effect across DSPs, sync opportunities, and cultural relevance. Just look at the Dreams phenomenon. Publishers who invest in tools to monitor UGC platforms and who are able to connect that data back to their catalogs will be well positioned to capitalise on these trends ahead of their peers.

There is also an infrastructure challenge. UGC platforms move at a speed that traditional licensing processes can struggle to keep up with. To capture value, publishers need agile systems that can handle micro-licensing at scale, and critically track attribution quickly to reconcile revenue efficiently.

UGC can often be dismissed as an add-on, particularly by smaller-scale rights holders. Larger and more established publishers have come to appreciate it as a core growth driver- even if data and tracking are still a developing competency. Just as streaming was underestimated in its early days, UGC is now on the cusp of becoming a multi-billion-dollar revenue channel in its own right.

Building for Growth Beyond Control

What unites AI, streaming, and UGC is that they are all largely external to the direct control of publishers. Yet each of these areas also offer significant growth potential. The common denominator is the ability to track, analyse, and respond to external signals with agility.

That is why data capabilities are now central to the role of a modern publisher. It is not enough to register catalogs and collect royalties efficiently. Publishers must also forecast where new revenue will emerge, model the impact of industry changes, and position themselves to capture value in markets and platforms they do not directly control. This is even more pertinent to those buying into publishing revenue streams, particularly if their acquisitions are of passive rights.

The publishing industry has often been portrayed as conservative or slow-moving, but the reality is that it can be at the forefront of these shifts. The deals being struck around AI, the direct negotiations with DSPs, and the growing recognition of UGC all show that publishers are not sitting back waiting for change, but are now part of actively shaping it.

The next phase of growth in music publishing will come from being able to capitalise on these kinds of external dynamics- by building the data capabilities to understand them, and creating the infrastructure to capture the created value at scale.