Spotify plans to introduce a brand-new AI-powered feature in early 2027 that will allow listeners to create their own remixes and cover versions of songs.
The company is currently negotiating licensing agreements and working to persuade artists to embrace the technology.
According to people familiar with the plan, the streaming platform aims to roll out the product in the first quarter of next year, with a possible official launch around the Grammy Awards in February.
One of the people said Spotify Technology S.A. (NYSE: SPOT) is considering charging subscribers an additional $4 to $5 per month for the service.
Paying subscribers would be able to use AI to generate adapted versions of popular songs, such as turning a folk ballad into a dance track, or simulating a particular singer performing a cover of another artist's work.
The people cautioned that the launch timeline and pricing have not been finalized and could still change.
After media reports about the AI remix feature emerged, Spotify Technology S.A. (NYSE: SPOT) shares surged nearly 6% on Friday.
The company declined to comment.
Spotify Technology S.A. (NYSE: SPOT) is in talks with Sony Music and Warner Music over licensing deals to enable the feature.
The company has already reached partnerships with Universal Music Group, independent label licensing alliance Merlin, and French music company Believe.
The launch represents a major test: whether the music industry can open up new revenue streams through generative AI, even as some artists resist the technology.
According to people familiar with the matter, Spotify Technology S.A. (NYSE: SPOT) and Universal Music, the world's largest record label, have separately met with multiple artists to persuade them to make their work available for the service.
An industry source said convincing current mainstream stars is harder than persuading some veteran artists.
Even if record labels have signed licensing agreements with Spotify Technology S.A. (NYSE: SPOT), artists themselves can still choose whether to participate.
Olivia Rodrigo, who is signed to Universal Music, said in an interview this month that she is firmly opposed to AI being used on her music.
She said: "I would never do that, absolutely not. My stance is very firm."
Spotify Technology S.A. (NYSE: SPOT) announced the product in May but has not disclosed further details since.
In August, co-CEO Gustav Söderström told investors the product would launch once it was ready.
The product is one of Spotify Technology S.A.'s (NYSE: SPOT) key initiatives to boost subscription revenue.
The company has been developing new products for core music fans, such as priority access to concert tickets and expanded audiobook privileges.
Spotify Technology S.A. (NYSE: SPOT) has promised investors it will maintain annual revenue growth of around 15% through 2030, raising questions about how it will sustain that growth target.
Bernstein analyst Ian Moore estimates that by the end of 2028, about 7% to 8% of Spotify Technology S.A. (NYSE: SPOT) subscribers in the United States will sign up for the AI service.
He believes the new paid add-on will help the company meet its revenue growth target.
This service differs from AI music generation tools like Suno: Suno can create new songs from scratch based on text prompts, while Spotify Technology S.A.'s (NYSE: SPOT) product lets fans adapt existing works by artists who have authorized participation in the program.
Under the plan, royalties generated from fan-made remixes would flow to the original songwriters.
People familiar with the matter said Spotify Technology S.A. (NYSE: SPOT) is also developing supporting mechanisms so that remixed works can enter playlists, with plays counted toward the original songs' Spotify Technology S.A. (NYSE: SPOT) chart statistics.
At an investor conference in September, Söderström proposed that veteran artists should join the AI service to increase their income.
"If you're an artist from the '80s or '90s, in the past if you wanted to make more money, you could only count on other artists to remix or cover your songs. Now, you can look forward to your own fans doing remixes and covers."
"If your fans create a remix of your song, your share of the streaming revenue pool would actually increase."
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