Protecting Music Royalty Income in the AI Era of Direct-to-Consumer (D2C) Advertising

Important rule changes affect use of AI-generated music.

By Pat Rickey

In 2026, the rules around AI-generated music have changed significantly, impacting how you can use it in your D2C campaigns and collect music royalties.

What Changed?

Previously, some AI music apps (like Suno and Udio) allowed users to claim ownership of songs they created by providing only text prompts. You’d pay a subscription fee, and the song was considered "yours." However, this is no longer the case.

Recently, major record companies sued Suno and Udio, alleging that their AI apps were using copyrighted music without permission. This process, called "scraping," involves AI analyzing and combining elements from existing songs — melodies, rhythms, chords, and even vocal styles — to create new ones.

To avoid a lengthy legal battle, these AI companies have reached agreements with both Warner and Universal Music Group. As part of these agreements, Suno and Udio can now use portions of their music catalogs (artists can choose whether to participate and potentially be compensated). As a result of these new partnerships, in November 2025, AI music apps updated their user terms of service. Instead of owning the music you create, you now have a license to use it.

What Does This Mean for You?

This is a big difference! You can still use AI-generated music, but you can't register it with performance rights organizations (PROs) — like BMI, ASCAP, SESAC, or SOCAN in Canada — and collect music performance royalties from your campaigns. Royalties will primarily go to the AI companies, record labels, and artists, with very little (likely 1 percent to 10 percent) potentially going to the person who provided the initial prompt. This is still an evolving situation, and the exact royalty split will be determined later.

How Can You Still Generate Music Royalties for Spots and Infomercials?

The key is to use AI as a tool to enhance your original compositions. Here's how:

1. Hire a Human Composer First: The composer must write the melody and harmonic structure — and write the lyric, if one is needed. This establishes originality. Both the Federal Copyright Office and the PROs are in alignment here.

2. AI as a Collaborator: Use AI to help with the arrangement and production. For example, you can use AI to create instrument tracks or background vocals. Think of it as collaborating with AI, rather than letting it create the entire song. Need a mandolin track? AI can generate it in minutes, saving you time and money!

This approach maintains the requirements for the registering entity of the music to be entitled to 100 percent of the public performance royalties that result from the airing of the infomercial or spot on TV. 

What's Next?

Sony Music has released AI music detection software that will likely be used to confirm whether registered tracks are original or AI. In 2026 and beyond, it will be even more important to document original music soundtracks used on TV via registered cue sheets by the composer with their PRO of choice.

Important Note: BMI has added a note to its website stating that you must disclaim if and how AI was used in the creation of the music registered. And, if later it determines that the music is AI, it will be removed from the catalog and any royalties paid out will be charged back.

Pat Rickey, president and founder of Downpat Music, brings more than 30 years of experience composing and managing music royalties for the direct-to-consumer (D2C) industry, ensuring composers and clients receive maximum returns from national TV placements. Rickey has become a thought leader for current AI music topics. Follow him on LinkedIn to stay up to date and informed: Pat Rickey on LinkedIn