HITS Act Approved, Indie Execs Speak Out, AI Music Sparks Worry
How The Music Business Works - Issue #19
July 10, 2025
Welcome back to How The Music Business Works!
This week’s update spans policy wins, industry pressure, and shifting dynamics in music discovery and global reach.
This week’s roundup highlights key turning points for the global music industry.
Independent artists score a major policy win with the passage of the HITS Act in the U.S., while European regulators face mounting pressure to dig deeper into a high-stakes acquisition. Spotify finds itself at the center of two very different conversations, one about the global rise of Australian music, and another about the platform’s vulnerability to viral AI acts.
Meanwhile, a new report from Ireland underscores music’s growing economic footprint and the need for stronger support for creators.
A2IM and Recording Academy Welcome Congressional Passage of HITS Act
The U.S. Congress has passed the HITS Act (Help Independent Tracks Succeed), allowing independent artists, producers, and labels to deduct up to $150,000 in recording expenses upfront. The American Association of Independent Music (A2IM) and the Recording Academy, who led advocacy efforts, praised the move as a historic win that levels the tax playing field with the film, TV, and theater industries. Leaders from both organizations highlighted the legislation as a major boost for indie music creators, ensuring they have the support needed to continue producing work in a shifting industry landscape.
Over 200 independent music executives have called on the European Commission to launch a deeper “phase two” investigation into Universal Music Group’s proposed $775 million acquisition of Downtown Music. The critics argue the deal threatens competition by giving UMG control over crucial infrastructure and sensitive data used by indie labels, potentially harming market fairness. The Commission must decide by July 22 whether to approve the deal or escalate the probe, with growing opposition signaling a likely move toward further scrutiny.
Spotify Ex-Employee Says ‘No Protections’ Exist Against AI Bands Like Velvet Sundown Going Viral
The Velvet Sundown, a fake band created using AI tool Suno, has gone viral on Spotify with over 500,000 monthly listeners—despite initially denying any AI involvement. Now labeled an “art hoax,” the project has sparked industry debate around authenticity, algorithm bias, and Spotify’s lack of protections against AI-generated music. While other platforms like Deezer flag potential AI content, Spotify doesn’t currently regulate it. A former Spotify data analyst warns the platform’s recommendation system now favors audio characteristics over human context, allowing AI acts to go viral without scrutiny.
Spotify Offers More Stats on Australian Music’s Global Growth
As Australian politicians revisit the idea of local music streaming quotas, Spotify is pushing back with data. The platform’s new Australian Music Global Impact List showcases local acts with the most international streams, spotlighting names like The Kid Laroi, Sia, and Dom Dolla. In 2024, royalties for Australian music rose 14%, with over 80% earned from global listeners. Spotify also revealed Australian dance music topped 1 billion global streams in March 2025, with Brazil and the Philippines emerging as key markets.
Irish Music-Industry Report Charts €1bn Annual Economic Impact
Ireland’s music industry contributes €1 billion annually to the national economy, according to a new IMRO report aimed at influencing government policy. The study highlights strong consumer engagement—over half of Irish adults subscribe to a music service, and the average adult spends €757 a year on live events. But it also flags growing financial strain on artists. IMRO is calling for tax incentives, greater grassroots support, a global marketing strategy inspired by South Korea, and full implementation of the EU’s AI Act.