AI Music Deals, A Rock Comeback and Country’s Coastal Invasion: Trends That Defined the Music Business in 2025
SOURCE:Hollywood Reporter|BY:Ethan Millman
Record labels' deals with AI music generation platforms bring more questions than answers heading into a crucial 2026.
Let’s get this out of the way immediately: AI was the dominating trend in the music business in 2025, and nothing else comes particularly close.
Topics that felt existential just a few years ago — the need for record labels, streaming payouts, the billion-dollar royalty black box — feel tiny now as the industry faces even larger questions in the AI age: Will music fans always care if a song is AI-generated? How much of a threat are AI songs going to be? How do artists get paid? Who will own this?
While 2024 was the year the music industry struck back, filing major copyright lawsuits against some of the biggest AI music developers, 2025 represents the first year in a path to legitimization, as those legal battles are now turning into sanctioned partnerships. AI music creators are getting signed to record deals, and their tracks are starting to find their way onto the charts.
Still, outside of AI, the music industry was, of course, still in a period of massive change. Major label heads Sylvia Rhone and David Massey stepped down and Warner Music Group announced a round of layoffs. K-pop got more into the mainstream than ever and rock music enjoyed an unexpected comeback.
Below, The Hollywood Reporter recaps the stories that defined the music business this year.
The Label-AI Truce Begins
Last year, the major music companies declared war against industry-leading AI music generation platforms Suno and Udio, with Universal Music Group, Sony Music Group and Warner Music Group filing landmark lawsuits against the startups on claims of infringing millions of songs by the world’s most iconic artists.
“These are straightforward cases of copyright infringement involving unlicensed copying of sound recordings on a massive scale,” RIAA chief legal officer Ken Doroshow said when the suit was first filed in 2024. “Suno and Udio are attempting to hide the full scope of their infringement rather than putting their services on a sound and lawful footing.”
A year later, as these entertainment/tech industry skirmishes tend to do, the legal war is now headed toward settlements and partnerships. Universal Music Group was the first to close a deal, announcing a partnership with Udio at the end of October. The industry cheered — and Udio’s own user base was massively pissed off — as Udio and UMG said they’d remove the ability to download creations on Udio, effectively keeping the AI music in a walled garden.
WMG followed soon after with a Udio settlement of its own, and subsequently became the first (and as of this story’s publication, still the only) music company to settle with Suno as well. Sony hasn’t settled with either company yet.
Meanwhile, outside of Suno and Udio, the labels have been entering partnerships with other companies, including Spotify, to develop more AI music creation tools and features. As the next chapter in the AI music era unfolds, we enter 2026 with still more questions than answers. How will the labels and platforms go about getting permission from all these artists and songwriters for these opt-in training deals? How will anyone get paid? Will the newer, ethically sourced models be any good? Only time will tell.
Country’s Coastal Invasion Continues
Country’s streaming era hot streak continued in 2025 as Big Loud/Republic act Morgan Wallen had one of the biggest albums of the year with I’m The Problem, which spent 12 non-consecutive weeks atop Billboard’s 200 Albums chart. With country showing little sign of slowing yet, over the past several years, the East and West Coast-based record labels have grown much more present in Music City. They’re signing more artists who would’ve traditionally stuck in the Nashville system, inspired by acts like Warner Records’ Zach Bryan, who became one of the genre’s biggest artists while under L.A.-based Warner Records.
Two of the biggest coastal record labels in the industry — UMG’s Interscope and WMG’s Atlantic — opened country outposts in 2025. Interscope revived the famed label Lost Highway, bringing on Kacey Musgraves as the label’s first new act. Atlantic, meanwhile, launched a country imprint called Atlantic Outpost a few months later. Don’t expect L.A. and New York’s intrigue with country to stop in the year ahead.
Distribution Becomes a Hot Acquisition Market
Even if it’s cooled some in the past several years, the music acquisition space is still active as artists from Jack White to Kelly Clarkson, Slipknot to the estate of the Notorious B.I.G. all sold off stakes in their catalogs this year. WMG, meanwhile, announced a $1.2 billion catalog acquisition vehicle with Bain Capital, suggesting bigger splashes in the future too.
But this year, some of the most significant acquisitions weren’t individual artist catalogs, but music distribution platforms instead. UMG kicked that off at the end of 2024 with news that its Virgin Music Group would acquire Downtown Music — the parent company to distributors CD Baby and FUGA — for $775 million. (That deal is still under review by EU competition authorities.)
Since then, Concord landed a haymaker of its own, acquiring indie music distributor Stem back in March. Will more music companies gobble up any more distribution platforms in 2026? As the indie music sector continues to grow — half of Spotify’s royalties went out to independent artists last year, the company said in March — expect music companies, ever-hungry for more market share, to keep targeting the distros.
The labels need access to indie artists,” one music-tech executive told THR in March. “It’s all about the users. They need their users. No one wants to be in the major label system. The majors are going to evolve more toward services companies.”
Rock and Roll Ain’t Dead Yet
Rock enjoyed a surge in 2025 thanks to acts like Sleep Token and Ghost, who managed to put rock atop Billboard’s 200 albums chart in back-to-back weeks for the first time in years back in May. Meanwhile, a Luminate midyear report suggested that rock was outpacing both Latin and country as the highest-growth genre in the U.S.
Beyond numbers, rock and guitar-driven music seem to be having a cool factor they just didn’t have a decade ago, as acts like Turnstile, Alex G and MJ Lenderman are breaking through the zeitgeist.
“The reality of the situation is every time it has reared its head again and dominated or kicked the mainstream’s ass, it’s always been when it’s spherical,” the singer said. “It’s multiple scenes going on at once, and it’s multiple scenes being highlighted by the freedom of the internet,” he continued. “I think with rock music, it’s not going to be one person.”
K-pop Groups Let Their Members Shine Solo
In K-pop, it’s long been the case that just one or two members of a group might release solo material while their group was active. That changed in 2025, as groups like Seventeen, ATEEZ and Twice have been letting their artists take more shine on their own.
Some groups had different reasoning. Seventeen, for example, was in the midst of a transitional time when they released their album Happy Burstday in May, as several of their members are now on military service. An extended hiatus makes solo projects the best possibility for new music while members are away.
“We would like to show more of our individualities, each of the members’ personalities and capabilities,” Seventeen’s Hoshi told THR in their May cover story about the decision to include 13 solo tracks on Happy Burstday. He added that showcasing the group’s individual talents would only strengthen and present a better front when they did reunite as a full group later on.
ATEEZ, Twice and Tomorrow x Together are just a few of the other groups that followed the solo song model in 2025. Unlike Seventeen, these groups opted to take this route as a way for each individual member to gain their own recognition and style while still working in the group. It’s worth noting that it’s been over six years since each group debuted (for Twice, it’s been 10). But for groups that are actively pushing themselves as a unit, it’s a bold statement to dedicate precious tracklisting space with individual songs.
The decision pays off in the long run, allowing the artists to build a solid solo discography and establish more of a solo identity outside of their respective groups before their debut albums are even released.