AI Music Revolution: A Boon for New Creators, a Blow to Industry Gatekeepers

 

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AI-generated music is rapidly moving from a tech curiosity to the ambient soundtrack of daily life. In small venues across the Philippines – from neighborhood barber shops to 24/7 gas station convenience stores – you might already be hearing tunes composed not by human musicians, but by algorithms. For new and independent music creators, this shift brings good news: it democratizes music production and opens doors that were once guarded by labels and licensing bodies. But for traditional industry gatekeepers – from record executives to collecting societies like FILSCAP – it’s bad news, threatening to upend long-standing revenue models. This article explores how AI music is revolutionizing background music, why businesses are embracing it, and what that means for creators, consumers, and the local music economy.

The Allure of AI Music for Small Businesses

For many small businesses (MSMEs) operating on razor-thin margins, paying annual fees to play licensed music can be a significant burden. In the Philippines, the Filipino Society of Composers, Authors and Publishers (FILSCAP) – the collective management organization for song royalties – requires businesses to obtain a license even just to play the radio or popular songs in public. A recent Supreme Court ruling reaffirmed that even playing a normal radio broadcast over speakers in a restaurant “is, in itself, a performance,” separate from the radio station’s own license. The court warned that allowing free radio play in commercial venues would “gravely affect the copyright holder’s market… causing a huge economic impact on the music industry” if establishments stopped paying royalties. In other words, even background music isn’t free – legally, businesses must pay for it. These compliance costs add up: depending on the venue’s size and usage, a small shop or café might owe anywhere from around ₱9,000 to over ₱20,000 per year in licensing fees under FILSCAP’s rules (even for basic radio playback).

It’s no surprise then that business owners are looking for a workaround. AI-generated background tracks present an attractive alternative. By using music composed by algorithms – often distributed under royalty-free licenses – entrepreneurs can sidestep those yearly fees entirely. One commercial background music provider notes that its tracks are “considered as royalty-free and…not subject to…public performance royalties”. In practical terms, that means unlimited music without having to worry about licenses or surprise enforcement visits. For a cash-strapped salon or restaurant, replacing the radio pop hits with AI-composed lo-fi beats or ambient tunes can save thousands of pesos a year. The legal risk is minimal because there are no established composers or record labels to claim copyright on an AI-generated piece (at least for now). In essence, AI music offers businesses a loophole to enjoy continuous background sound at near-zero cost and hassle.

Democratizing Music Creation – Good News for New Creators

The rise of AI music isn’t just about cost-cutting – it’s also about who gets to create music in the first place. Traditionally, producing professional-quality music required years of training, expensive gear, or access to recording studios and skilled audio engineers. Those barriers often kept music creation (and the income from it) in the hands of a relatively exclusive group. AI is helping to dismantle those barriers. Today, affordable AI-powered tools for composition, vocal processing, and mastering allow independent artists to achieve “studio-grade results from their home setups”. This means a hobbyist with a laptop can generate backing tracks, instrumental beats, or even complete songs without a big budget or a record label. The democratization of music technology powered by AI is enabling creators to produce, refine, and distribute work “without expensive equipment or extensive technical training”.

For new creators, this is great news. They can experiment with AI composition assistants that suggest chord progressions or melodies, use AI vocal generators to add harmonies or even simulate different vocal styles, and employ AI mastering services to polish the final sound. All of this can be done at a fraction of the cost and time that was required just a decade ago. In fact, entire music channels have sprung up around AI-generated content. On platforms like YouTube, “channels already exist that are built entirely on AI-generated content, including music,” some pulling hundreds of thousands of views per video. The demand exists and is growing – audiences are tuning in, often without even realizing the music is AI-made. For independent musicians or tech-savvy creators, this presents a new way to monetize: by generating endless streams of ambient music, lo-fi beats, or genre-specific tracks that can attract listeners globally without worrying about licensing costs or royalty splits. In short, AI is leveling the playing field for who can create music and earn from it, allowing fresh talent (or even non-musicians with creative ideas) to enter the scene more easily than ever before.

Bad News for Gatekeepers and the “Exclusive” Music Industry

While new creators and small venues celebrate these developments, the traditional music industry institutions are less thrilled. AI-generated music cuts out the gatekeepers who once controlled distribution and earnings. Performing rights organizations like FILSCAP – which some frustrated business owners now deride as "FILSCA..." – see the writing on the wall. If a significant number of cafés, shops, and gyms switch to royalty-free AI music playlists, the steady stream of license fees that FILSCAP collects could dwindle. The Supreme Court case mentioned earlier illustrates what’s at stake: the restaurant in that case refused to pay FILSCAP and played the radio; the court not only upheld FILSCAP’s right to collect fees but even ordered ₱10,000 in damages for the unlicensed performances. That enforcement power is meaningful only as long as businesses need to use music under FILSCAP’s repertoire. AI music changes that equation by offering a way to have music without using any protected repertoire at all.

It’s not just PROs that are threatened. Record labels and mainstream artists also face a shift if AI music becomes ubiquitous in public spaces. Traditionally, having your song added to hundreds of store playlists or radio rotations meant more exposure and performance royalties. Now imagine those slots being filled by AI-composed instrumental tracks or AI-generated songs – the exposure for human artists shrinks, and so do the royalty checks. This trend essentially sidelines the “exclusive” music industry (the hitmakers and chart-toppers) in contexts where they used to dominate. Major music companies have noticed this threat. (In fact, one reason big streaming platforms are exploring AI is to potentially reduce royalty payouts; in 2023 Spotify paid out nearly $9 billion in royalties, so replacing some licensed tracks with AI content could mean huge savings.) Closer to home, FILSCAP and similar bodies risk loss of relevance if businesses en masse choose free AI tunes over licensed OPM hits. The gatekeepers’ leverage erodes when technology gives users an alternative source of content that bypasses the toll gate.

However, this shift raises complex questions. Who loses in this scenario? Certainly the established songwriters and composers stand to lose some income if their works are performed less in public. The broader local music economy could feel the pinch – those annual license fees ultimately get distributed (minus administrative cuts) to Filipino composers and publishers. If an AI track replaces a pop song at a coffee shop, the human artist gets nothing. Multiply that by thousands of establishments and it could mean a real drop in earnings for working musicians and songwriters. Additionally, when fewer businesses play popular or local music, cultural exposure diminishes. The “gatekeepers” argue that these fees were in place for a reason: to ensure creators get paid and music culture thrives. From their perspective, AI music in public places isn’t just a cost-saving hack – it’s a threat to the sustainability of professional music-making.

Mixed Reactions: Do Customers Notice the Difference?

How are everyday listeners responding to this quiet invasion of AI tunes? The feedback has been polarizing. On one hand, a lot of customers barely notice a change. If you’re sipping your latte to a mellow downtempo beat or browsing in a store with gentle background music, you might not think twice about whether a human or an AI composed it. Especially when the AI-generated music is instrumental or in genres like ambient and lo-fi, it easily fades into the background (which is exactly what background music is meant to do). In fact, because most people aren’t actively scrutinizing store music, many “don’t notice” the switch at all. Business owners point out that as long as the vibe feels right – calming music in a spa, upbeat tunes in a gym – customers are satisfied and the source is a non-issue.

On the other hand, some listeners do pick up on something different, and not always in a good way. Keen-eared music fans have reported that AI-generated songs can sound formulaic or emotionally flat. One college reviewer described an AI music performance as “too electronic, too soulless” – as if it lacked the emotional spark that comes from human creativity. Common critiques are that the tracks have repetitive structures and a kind of copy-paste feel, even if they’re technically listenable. If the AI tries to mimic vocals, the result can be even more off-putting: synthetic voices that just don’t have the warmth or expressiveness of a real singer. In online discussions, even entrepreneurs experimenting with AI music note that current algorithms still “have mastering issues and cohesion issues” in the final output – essentially, the mixing might be weak and the song doesn’t flow as naturally as a human-made track. To some patrons, especially those who really value music, this can make the atmosphere feel cheapened or uncanny. They see it as a downgrade in quality, like replacing a skilled live barista with a vending machine – it gets the job done, but lacks soul.

Musicians and artists, unsurprisingly, have deeper concerns. Beyond just aesthetic qualms, they worry about what widespread AI background music means for the creative ecosystem. One concern is displaced income: if AI music becomes the default in many businesses, that’s fewer royalty-paying gigs for human composers and less airplay for songs that might drive fans to buy music or concert tickets. Another concern is authorship and authenticity – music has always been tied to human experience and expression, so if cafés are playing anonymous AI muzak, does it erode the appreciation for human artistry? Some also point out the environmental cost behind the scenes. Generating thousands of hours of AI music isn’t as eco-friendly as it seems; it requires large-scale computing power and data centers sucking up electricity. Studies note that AI music creation requires substantial computational power and data centers “run on vast amounts of electricity and cooling”, contributing to carbon emissions. In short, the convenience of AI tunes hides a bigger footprint that someone has to consider. These issues – artistic, economic, and environmental – make the AI music boom more controversial than it might appear at first listen.

The Road Ahead: Who Pays the Price for “Free” Music?

As AI-generated music becomes more prevalent, especially as a cost-saving workaround for businesses, there’s a looming question: who ultimately pays the price for this choice? In the immediate term, the benefit clearly goes to the businesses and perhaps their customers. Owners save money on licensing fees; customers enjoy an environment with music and maybe slightly cheaper goods or services (since the shop isn’t factoring music licensing into its costs). New AI-savvy creators also gain, finding an audience for their AI-generated tracks and even monetizing streams online thanks to the demand for royalty-free music. We’re already seeing YouTube channels and streaming playlists featuring AI-made music rack up views and ad revenue, proving that this content has market value.

But the costs of this shift are dispersed elsewhere. Professional musicians and songwriters see a slice of their revenue pie being eaten by algorithms – each small shop that flips to AI music is a tiny loss, but at scale it could reshape the local music economy. There’s also a cultural cost: will local indie artists or OPM hits find it harder to get exposure if public venues gravitate to no-name AI tracks? And what about the consumer experience in the long run – if AI music becomes the default muzak, does the overall quality of what we hear in public degrade, or will the AI get so good that no one can tell the difference? These are open questions. Moreover, the environmental question looms in the background: the “free” music from AI isn’t truly free if you account for the energy used to produce it. That cost, in terms of carbon footprint, is one that society at large will have to bear if AI generation scales up massively.

For now, under intense margin pressure, many business owners see AI background music as a rational choice. It’s hard to argue with free (or ultra-cheap) unlimited music that also sidesteps legal worries. Today it might be a workaround to avoid fees, but if the trend accelerates, it could permanently reshape the local music landscape – from how musicians earn a living to what patrons come to expect when they walk into a shop. Will we get used to a world where the songs that surround us in daily life have no human author? Or will there be a backlash demanding real artist-made ambiance? It may ultimately depend on whether people feel something is missing when the human touch is gone.

So, what about you? The next time you sip coffee at your local café or pick up groceries, take a moment to listen. That mellow tune in the background – would it bother you if you discovered an AI composed it, or would you barely notice the difference? As AI music becomes more common, each of us might have to decide how much it matters. For some, music is music as long as it sounds good. For others, knowing there’s a human story and creativity behind the song might make all the difference. The only certainty is that this debate is just beginning, and its outcome will play out in the soundtracks of our everyday lives.

Sources: Recent court decisions and industry reports on music licensing; tech and music expert analyses on AI music’s rise; commentary from artists and listeners on AI-generated music quality; and studies on the environmental impact of AI in media.