Spotify Signs Merlin, Bringing Independent Labels Into Its AI Covers and Remixes Deal

On 4 August 2026, Spotify and Merlin — the rights agency that licenses music on behalf of independent labels and distributors worldwide — announced a licensing agreement covering Spotify's forthcoming fan-made AI covers and remixes feature. The deal brings independent labels into a licensing framework that, until now, included only Universal Music Group and Universal Music Publishing Group, which signed the first agreement in May 2026 covering both recorded music and publishing rights.

For listeners who care about exactly what sits inside the streaming library they pay for, this is a story about how that library's boundaries are being drawn — one licensing deal at a time, with the independent sector now formally part of the conversation alongside a major.

What Spotify and Merlin announced

According to Spotify's own newsroom post, Merlin represents independent labels and distributors across more than 70 countries, accounting for roughly 15% of the global recorded music market. TechCrunch, reporting on the same announcement, put a more specific number on it: the deal brings over 30,000 independent labels from Merlin's network into the fold. Both figures come from the companies' own framing of the deal — Spotify's newsroom for the country and market-share description, TechCrunch for the label count — and describe the same agreement from two angles rather than two different things.

Participation is opt-in. Merlin members individually choose whether to make their catalogues available to the AI covers and remixes tool; nothing is automatic. Spotify has not detailed the mechanics of how that choice is exercised across sound-recording rights versus composition and publishing rights, so it isn't yet clear how granular that opt-in will be, or who at the label level makes the call.

What the companies said

Charlie Hellman, SVP and Global Head of Music at Spotify, framed the agreement around credit and compensation: "This agreement with Merlin ensures participating artists are credited and compensated, and that every creation drives listeners back to the original work." That's Spotify's stated position on how the feature is meant to work, not an independently verified outcome.

Merlin CEO Charlie Lexton described the deal in terms of optionality for the agency's members: "Giving our members' artists the choice to make their music available as part of this exciting technology, while ensuring the opportunity to participate in an additional revenue stream, is exactly what Merlin is here to do."

Spotify co-CEO Alex Norstrom, quoted by TechCrunch, put consent and compensation at the center of the pitch as well: "we want artists to be consenting...we also obviously want to give them credit. And...we also drive the compensation." As with Hellman's comment, this is Spotify articulating what it intends the model to do — the actual compensation structure and how payouts are calculated haven't been disclosed by either company.

Still unannounced: price, launch date, and scope

Spotify has confirmed the feature is expected to arrive as a paid add-on for Premium subscribers, but the company has not announced a price, and has not set a launch date. No market or country availability has been specified either. Anyone reading a price tag or release window into this announcement is reading further than Spotify has actually gone.

TechCrunch reports that a research preview will roll out to a subset of users first, and that Spotify has said the tool would not need a full music catalogue to launch — suggesting the company may bring the feature to a limited slice of licensed content before broader rights deals are in place, rather than waiting for universal coverage across labels.

It's also worth being precise about who's in and who isn't. As of this agreement, the confirmed licensing partners are Universal Music Group and Universal Music Publishing Group (May 2026) and participating members of Merlin's independent network (August 2026). Warner Music and Sony Music have not been announced as participants, and no individual artists or specific recordings have been confirmed as available through the tool. Whatever eventually ships will be built catalogue by catalogue, rights holder by rights holder.

Why this matters beyond Spotify

TechCrunch's report situates the Merlin deal against a broader backdrop: Deezer has reported that over 50% of daily uploads to its platform are now AI-generated. That's a Deezer figure about Deezer's own upload volume, not a Spotify statistic, but it's useful context for why platforms are racing to lock down licensing terms now rather than later — the volume of AI-touched content entering streaming services generally is already substantial, licensed or not.

Spotify's approach, at least as described in its own newsroom post, treats artist consent as central to how the feature is meant to function, with rights holders opting their catalogues in deal by deal rather than the tool launching against an entire library at once. Whether that holds up as more labels — major or independent — decide whether to sign on is something only future announcements will settle.

For now, what's confirmed is limited but specific: a second licensing agreement, this one with Merlin's independent label network, an opt-in structure, and a stated intention to credit and compensate participating artists. Everything about price, timing, and the eventual shape of the catalogue remains open.

This article was written by an AI system from Into The HiFi AI Desk, generated from the following sources, with no human editing pass before publication: Spotify newsroom, 2026-08-04, TechCrunch, 2026-08-04, Billboard, Music Week, ecoustics follow-up, 2026-08-10.