AI & data standards set to transform global music industry

The global music industry is facing a period of significant upheaval as data and artificial intelligence reshape core business processes, according to Jacob Varghese, Chief Executive Officer and Founder of Noctil. New pressures, including legal rulings and the rise of generative AI, are spurring calls for comprehensive changes in the management and use of data across the sector.

AI enforcement

Legal trends are forcing music firms to adopt new approaches to AI-generated content. Platforms are seeing thousands of AI-generated tracks uploaded each day, pushing traditional systems to their limits. Varghese believes the industry must embrace "data-level enforcement" as standard practice by 2026.

"The rise of generative AI demands the industry move from discussing copyright concerns to mandating data-level enforcement in 2026. While major licensing deals are being secured with AI creation companies, the issue is no longer just about the commercial agreement; it's about technological governance. With streaming services seeing up to 40,000 AI-generated tracks uploaded daily by late 2025, and 82% of listeners unable to distinguish them from human-made music, the volume of data is collapsing legacy systems. We must establish new, non-negotiable data fields, such as 'AI-assisted' and 'fully AI-generated' flags, to ensure transparent attribution and compensation, thereby transforming today's crisis into a traceable and enforceable model."

Data-driven licensing

Secondary usage of music in social media, gaming, and virtual environments is growing rapidly, but industry revenue capture lags behind. Varghese points to the lack of structured metadata as the main obstacle. He says automated and standardised data matching across platforms is crucial for capturing full value from each track.

"The failure to fully capture the value of micro-transactions in secondary usage, particularly across short video, gaming, and virtual worlds, represents the biggest leakage point in our industry's revenue stream. This relies entirely on clean, standardised metadata. In 2026, the industry must industrialise this licensing process, leveraging error-free data matching to build seamless, efficient workflows that capture the full value of a track across these high-volume, multi-platform spaces," said Varghese.

Global data standards

International expansion has introduced additional data integration challenges. Varghese warns that disorganised data stymies efficient music distribution and rightsholder payment processes worldwide. He urges widespread adoption of common industry standards to ensure consistent flow and data accuracy across markets.

"As global operations continue to expand, fragmented, siloed data will actively break global delivery workflows. The importance of rights metadata, data interoperability, and global delivery workflows is now a requirement for survival. We must drive industry-wide adoption of universal standards and connected systems to ensure that a track's information travels seamlessly across borders, guaranteeing prompt and accurate payment," said Varghese.

Asset transparency

Music catalogues are increasingly acquired as financial assets by institutional investors, further raising the stakes for data reliability. According to Varghese, the music industry risks losing out on global royalty payments without improvements in data quality.

"Music continues to play a major role as a tradable asset, attracting significant institutional investment. This trend underscores the critical need for absolute data clarity and transparency. For music to function as a mature financial asset in 2026, the underlying royalty and ownership data must be clean, granular and verifiable. Considering the estimated $2.5 billion in globally unclaimed royalties due to data issues, data integrity is the new security, and data governance is now a financial imperative," said Varghese.

Emerging markets

Rising music consumption in Africa, South America, Asia, and the Middle East presents both opportunities and complexities for global infrastructure. The diversity of regional rights and payment structures requires flexible, adaptive data systems to support accurate revenue collection and distribution.

"The challenge posed by growth in emerging markets across Africa, South America, and Asia is not simply market expansion; it is an integration challenge. With regions such as the Middle East & North Africa (+22.8%) and Sub-Saharan Africa (+22.6%) leading global growth in 2024, our global music infrastructure must be engineered to process diverse data sets and cater to the unique regional rights and payment structures of these high-growth areas, ensuring all revenue can be accurately collected and distributed," said Varghese.

AI for workflow

Varghese predicts AI's most pressing task in the coming years will be to update and automate industry workflows, rather than generate new music itself. He anticipates that specialised machine learning will play an essential role in managing "data debt" and accelerating royalty payments to musicians and rights holders.

"Finally, I predict AI's most immediate and critical role in 2026 will be rescue, not creation. We will see the rise of AI tooling focused on workflow automation to address the massive data debt the industry faces. We must leverage SLM (Specialised Large Model), Agentic AI and plain Machine Learning for data validation, deduplication and reconciliation to streamline operations, accelerate royalty distributions and free up resources for creative endeavours," said Varghese.