The future of the music creator economy

AI is a black swan event for music, intertwining the futures of the creator economy and the music industry. The number of gen AI music monthly active users (MAUs) nearly tripled between 2023 and 2025, adding nearly nine times as many users as the global base of musicians over the same period. The grey zone between artist and fan is becoming the attention battleground between listening and creation. The majority of consumers will want to spend most of their time listening, but a growing share want to spend some of their time creating.

The music creator economy story is being rewritten. AI may hold the pen right now, but in many respects, it is merely channeling narratives that were already in full flow before AI entered the chat. This is both the context and the focus of MIDiA’s groundbreaking new Future of the music creator economy report.

MIDiA has been covering the music creator economy for over half a decade now, and our annual State of the Nation reports have become a must-read for anyone in the space. This year, for the first time, we opted for a ’Future of…’ format because what will happen is just as important as what has happened. In addition to building extensive consumer, creator, market and forecast data, we spoke to leaders at traditional creator tools companies, creator platforms, investors, and AI vendors (many of whom are quoted in the report). It plots the intertwining paths of creator tools, creators, consumers, and AI to build a bold vision of a future music business in which the dividing lines between these constituencies blur, in some cases all but disappearing.

These are some of the themes and insights:

Between 2020 and 2025 the number of global musicians grew by 33% and music creators (including gen AI users) grew by 167% to reach 148.7 million, with gen AI users growing fastest

• Gen AI will continue to reshape the music creator economy, representing 38% of all music software, sounds, and services revenues by 2033. DAWs will remain the centre of it, though many of those will be AI DAWs
• AI is widening the creative funnel, acting as an entry point for new, novice creators and enabling music superfans to lean in and participate. Its impact on the traditional music creator economy is similarly strong but not evenly felt, with gen AI’s rapid growth mirroring declines in some segments but driving growth in others
• AI will turn an increasingly large share of music consumers into music creators. For creator tools companies, the creator base will be diluted by novice enthusiasts, pushing the funnel upstream, reducing conversion rates but increasing volume of new buyers. For DSPs, this will create competition for time, attention and spend

The music industry is focused, understandably, on the impact on copyright and royalties income. Creator tools companies are grappling with how to integrate AI features and how to integrate themselves into emerging AI workflows. Both are important, but what everyone should be paying attention to is gen AI’s potential to turn millions of listeners into creators.

While the report focuses on AI’s potential to open creativity to large swathes of non-musician fans, we also explore AI’s threat to music culture. AI, like all tools, is not inherently bad or good but action needs to be taken to protect against a) bad actors and b) unintended consequences. One of these unintended consequences is the risk of ‘model collapse’ normalising out the unusual, the outliers, the exceptions, and flaws that make humans human, reducing everything to a lowest common denominator average. That may be an irritation in the wider internet, it would be a cultural catastrophe for music.

Yet, harnessed responsibly, AI will act as a catalyst that quickly pulls together the traditional music business and the creator economy. This merging of worlds is something we’ve been writing about at MIDiA for years. With some notable exceptions (e.g., UMG’s Abbey Road REDD) the traditional music business has, instead of harnessing the potential of the creator economy, pulled up its drawbridges instead, in the shape of streaming earnings thresholds, designed to disincentivise long tail creators. AI changed that, with large rightsholders striking deals with gen AI companies. Don’t be distracted by the lawsuits – each large rightsholder is picking their preferred partner and looking to weaken the others. If you want to understand just how seriously the music industry is taking things, look no further than UMG and Spotify’s audio modification announcement.The coming years will be volatile for sure but one thing they will not be is boring.

If you are not yet a MIDiA client but would like to learn more about the report, then please email businessdevelopment@midiaresearch.com 

Here is a high-level view of what the report contains:

• Consumer gen AI music behaviour
• Gen AI / stem separation / vocal generation revenues, buyers, active users and ARPU, 2023–2025
• DAW, plugins/VSTs, sounds/samples, skills sharing / learning and gen AI - all for buyers, revenue, ARPU, with forecasts to 2033
• Value of creator tools ecosystem, including funding, commerce, distribution, marketing, business, learning, collaboration, production and sounds
• Consumer interest in audio modification features
• Gen AI bear, base, bull scenarios
• Audio modification forecasts to 2033
• Musicians, music creators and gen AI user forecasts to 2033
• Music creator tools subscribers and subscription revenue forecasts to 2033, with sub-splits for DAWs
• Playbooks for platforms, creators / talent, rightsholders, DSPs, social platforms, and for culture
• Future evolution of workflows, creation and platforms