The music biz better get ready for a seismic shift by 2026, as tech and AI are set to redefine revenue and attribution.
Hypebot�s Future Predictions series returns, diving into the insights of leading industry experts on what 2026 might hold for the music world. Jacob Varghese, a seasoned technology leader and founder of the metadata management platform Noctil, shared his compelling predictions on the role of data and technology in shaping the industry�s future.
Varghese believes that as generative AI continues to rise, the focus will shift from merely discussing copyright issues to enforcing robust data governance. He notes that as many as 40,000 AI-generated tracks could flood streaming services daily by the end of 2025, with a staggering 82% of listeners unable to distinguish these from human-created music. To tackle this influx, Varghese argues for the establishment of new data fields�such as flags for ‘AI-assisted’ and ‘fully AI-generated’ tracks�to ensure clear and traceable attribution and compensation.
Moreover, Varghese highlights the problem of unrecognized revenue in the realms of short videos, gaming, and virtual worlds, which he sees as the primary leakage point in the industry�s income. He emphasizes that clean and standardized metadata is vital for capturing the value of micro-transactions across these platforms. In his view, 2026 must see a push to industrialize the licensing process, utilizing accurate data matching to create efficient workflows that maximize revenue from high-volume channels.
As global operations expand, Varghese warns that fragmented data can disrupt international delivery workflows. He stresses the need for rights metadata and data interoperability to facilitate seamless information transfers across borders, thus ensuring timely and accurate payments. The adoption of universal standards will be critical for the industry�s survival in this increasingly interconnected environment.
Looking at the financial angle, Varghese notes that music is becoming an attractive asset for institutional investment, which increases the importance of clear and reliable data. For music to serve as a mature financial asset by 2026, he states that royalty and ownership information must be precise and verifiable. With an estimated $2.5 billion in unclaimed royalties due to data issues, he asserts that data integrity will become central to financial security.
Finally, Varghese predicts that AI will play a vital role in resolving the industry�s data challenges rather than merely generating music. He anticipates the emergence of AI tools aimed at automating workflows to manage the significant data debt facing the industry. By utilizing specialized large models, agentic AI, and machine learning, he believes the sector can streamline operations, expedite royalty distributions, and allocate more resources toward fostering creativity.