The world’s biggest record company wants streaming services to stop paying for AI slop the way they pay for real artists. On Universal Music Group’s third-quarter earnings call on 29 October 2026 (CET), chairman and chief executive Sir Lucian Grainge told analysts that “the structure of our DSP agreements has to change, so the compensation better reflects the value different content creates.” DSPs are digital service providers: Spotify, Apple Music, YouTube, Amazon and the rest.
Grainge was blunt about where AI-generated music fits. “Put plainly, unethically generated AI tracks should never be compensated on the same basis as music that creates real and lasting demand,” he said, according to Digital Music News. “And why would a music service even want to host them?” For anyone making music with AI tools, this is the clearest signal yet of how the major labels plan to use their next round of streaming negotiations.
What Grainge said about AI slop
Grainge framed the issue as one of scale. According to a transcript of the call, he said that in early 2025 roughly 10,000 AI-generated tracks were arriving each day, and that more than 90,000 fully AI-generated tracks are now uploaded daily, with “volume growing faster than the safeguards”. That figure matches what Deezer has reported for its own service: in July, Deezer said it was receiving nearly 90,000 fully AI-generated tracks a day, more than half of all new music delivered on peak days in June.
His main target was the way streaming money is shared. Most services pay rights holders from a pooled, pro-rata model, in which every stream counts the same towards a share of the pot. “The uniform application of pro-rata payments makes the problem worse,” Grainge said, because it treats AI slop the same as “the greatest songs in the world” and “dilutes the compensation earned by real talent.”
He also gave an example from the charts. According to the transcript, Grainge said that on the blues charts of some major streaming services, as many as five of the top 10 albums are attributed to AI-generated acts without clear labelling or disclosure. He called the blues “a north star of authenticity in music” and said its charts are being polluted by AI content. UMG did not name the services or the acts, and Dizy has not independently checked those charts.
The four AI protections UMG wants in its deals
Michael Nash, UMG’s chief digital officer, set out what the company already negotiates for. He said the protections vary by partnership but include four key elements:
- AI models can’t be trained on UMG artists’ work without consent;
- AI recordings trained on UMG content without authorisation are removed;
- AI content that misappropriates the identities of UMG artists and infringes their right of publicity is removed; and
- fully AI-generated music must not dilute UMG artists’ royalties, which Nash called perhaps the most important.
Nash said UMG had secured key protections in its YouTube deal and a recent Spotify agreement, and that the contracts also include monitoring requirements. The terms themselves are not public. Earlier on the call, Grainge described these as “first-of-their-kind anti-dilution protections” in UMG’s platform agreements, and said the company is helping establish AI labelling and chart standards for licensed, human-led recordings.
Nash also pointed to moves by the streaming services themselves: Spotify keeping slop out of its recommendations, as we covered in Spotify Pulls 50M AI Slop Tracks From Recommendations, and Deezer’s option for listeners to exclude fully AI-generated music, covered in Deezer Will Let Users Block Fully AI-Generated Music. He said 74% of US consumers have expressed interest in being able to exclude AI content, though he did not say where that figure comes from.
UMG is still betting on licensed AI
None of this means UMG is against AI music altogether. Grainge said the company’s licensed AI partnerships, including work with ElevenLabs, Stability AI, Splice and NVIDIA, are moving “from principles to products, and from products to revenue”, and that UMG expects them “to begin generating incremental revenue in fiscal ’27.” The line UMG is drawing is between AI built on licensed, consented music and AI content that competes with its artists for the same royalty pool.
The comments came alongside solid results. UMG reported third-quarter revenue of €3.394 billion, up 11.7% in constant currency, or 5.3% excluding Downtown, the independent music company it now owns. Recorded music subscription revenue grew 19.2% in constant currency, helped by wholesale price rises. Grainge said UMG has begun the next phase of its transformation, running to the end of 2028, which will look closely at how it negotiates price and executes platform agreements.
Why it matters
For artists and AI music creators
UMG is not proposing a ban on AI music. It is arguing that AI tracks should earn according to the “real and lasting demand” they create, and that unlabelled, mass-produced uploads should not share the pool on equal terms. If the major labels win that argument with streaming services, the creators who do best will be those who disclose how a track was made and build a genuine audience for it, rather than those who upload in bulk. Distributors are already reacting: DistroKid removed tracks in response to UMG’s claims earlier this month, which we reported in DistroKid Pulls Songs Over UMG’s ‘AI-Slop’ Lawsuit.
For Australia
Australian listeners use the same global services, so any change to how UMG’s deals treat AI content will apply here too. On the chart side, ARIA already excludes wholly AI-generated recordings from its charts, as of the chart dated 31 August 2026, while recordings that use generative AI in a supporting role remain eligible. Grainge’s blues example shows why that kind of rule matters: without clear labelling, listeners can’t tell what they are looking at.
For the industry
The call puts in public what Suno has been arguing in court. In the Universal and Sony copyright case, Suno claims the labels use their catalogues to win “anti-AI concessions” from streaming services, as we explained in Suno Lawsuit: Suno Says Labels Push Anti-AI Deal Terms. UMG now openly describes anti-dilution protections as a feature of its deals. Whether that is fair protection of artists or, as Suno argues, misuse of copyright is a question for the court. No ruling has been made.
What happens next
UMG did not set out new deal terms or a timetable, and no streaming service has publicly responded to Grainge’s call. Watch for changes in how services label AI music, rank it in charts and treat it in royalty calculations, and for further filings in the Suno case, where Apple’s reply on Suno’s subpoena is due on 3 November (US time). Dizy will keep tracking each step.
Following AI music on Dizy
Dizy is built on disclosure: artists declare whether a track is AI-assisted or AI-generated when they submit, and listeners decide what rises. See the Top 100, the Blues chart and New releases, browse AI artists, or submit your track. For a guide to reading the numbers, see How to Read AI Music Charts Like a Top 40.
Sources
Digital Music News: Universal Music posts mixed Q3 ’26 results, eyes new DSP deals (29 October 2026)
Universal Music Group Q3 2026 earnings call transcript (29 October 2026), via earningscalls.dev
Deezer Newsroom: AI music has surpassed 50% of new music uploads for the first time (21 July 2026)
ARIA: ARIA Charts set eligibility rules for recordings made with AI
