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- [00:05]
A
I'm Dan Runcy. Welcome to Trapital. Today we're gonna dig into the next big thing. This has been the central topic that has been at the heart of a lot of the question marks for people who work in music. Streaming has been great. It has lifted the industry out of one of its darkest periods. But as streaming growth starts to slow down, so many people are wondering, what's next? What is that next big growth lever going to be? For past few years, a lot of the industry executives have hanged their hats on superfans. They want to be able to find that 20, 25% of fans that care so much about music and making sure that they could offer the right products to them. One of those products that's gained a lot more traction recently in the age of AI is is music creation. And the flagship product at the moment in music creation for AI is Suno. Suno recently announced that it has over 2 million paid subscribers and over $300 million in annual recurring revenue. Those are impressive numbers, especially because it was just in fall 2025 that Suno had half of that recurring revenue at $150 million. So the platform is clearly growing. There are users that want to pay for the service, and it is both an exciting and frustrating time for the industry to figure a lot of this out. The record labels are eager to figure it out so they can tell Wall street and tell their shareholders that they are ahead of the curve and pushing things forward. These tech platforms also want to figure it out so they can grow into their lofty valuations, especially for the AI driven companies and the consumers who love music worldwide and want to engage with it. Likely hope that the regulation and disputes about how the pie gets split don't keep them away from great opportunities they can have to create and express their fandom. So to break it all down, we're joined by friend of the pod, Tati Sirisano to answer that question. What does the next big thing look like? How big are the opportunities? And how do we see this all playing out? So I hope you enjoy this one as much as we did. Let's dive in if you love listening to trapital and want to stay ahead in the world of tech startups and venture capital equity, TechCrunch's flagship podcast has the inside scoop. Every Wednesday and Friday, they dive into the stories that matter most, from expert interviews to in depth discussions and roundtable chats with their team of TechCrunch reporters. Whether you're an entrepreneur looking for tips or just curious about what's shaping Tomorrow's world. They've got you covered. Tune in to Equity wherever you get your podcasts. This episode of trapital is presented by our friends at Symphonic Distribution who are celebrating Women's History Month by launching their fifth installment of their women's mentorship program. Symphonic pairs a select emerging talent with an established professional across the global music industry, with which creates a space for guidance, growth and real connections. The applications are currently Open now through March 23, 2026. If you are interested, you should go to their website symphonic.com woman empowered. You can go there. You can choose to apply as a mentee or as a mentor. So go to the bottom of this page, click there and you can choose one of those options. Again. The applications will be open until March 23rd. You can. You can also click the link in our show notes to learn more. All right, we're here with Tati Sirsano from Midia Research and we're going to talk about a big question. Is creation with AI tools or any other type of tools? How big is that market and is that the next growth lever for these industries? Tati, welcome to the show. I'm glad we could break this all down.
- [04:00]
B
Yeah, thanks for having me, Dan. Anyone who has been following my work or knows me knows that this sort of consumer creation, so to speak, angle is something I've been talking about a lot for, for most of my career. Even the context of how we talk about this has changed over the past few years that I've been studying it.
- [04:15]
A
I think there's a few trends that are converging with this. These products themselves, like Suno and others, have been raising more money, launching more partnerships, announcing more subscribers, the majors and others, trying to find ways to increase the value of their music, trying to show to Wall street, trying to show to others that hey, this is a growth story. We have the opportunity to capitalize this, not get deplatformed by this and these products and these opportunities. So what can this look like?
- [04:42]
B
Totally. Because I think one other thing about it that that kind of caught my eye earlier that I was texting you about is like Robert Kinsel from Warner's shareholder reporter saying that the past has been about consumption, but the future will be about consumption and creation. Mark at MIDIA has been studying it for 10 years and now you have a major label executive saying, you know, this is part of the, the part of the strategy.
- [05:03]
A
And Warner in that same letter you're referencing, talked about Suno. They're the first of the major record labels that had partnered with Pseudo that had settled the dispute that they had had ongoing. And they reference the current numbers that Suno has self reported in terms of 2 million subscribers and the service currently having over $300 million in annual recurring revenue. A company like Warner Music that owns music copyright, it's important for them to show to the market that hey, we're not just going to be disrupted by AI. And I think the existence of AI has taken a hit on a lot of companies that own any form of media content, music, movies, film, tv, so on and so forth.
- [05:45]
B
Yeah, and it checks the super fans box, the fan monetization box and it checks the AI strategy box at the same time.
- [05:51]
A
We did talk about a bit the growth story with streaming slowing down, but this nebulous concept of super fans and I think that it's been ongoing for a while, especially as streaming matured and it was clear that streaming did a great job of being a lowest common denominator product. I don't mean that as a knock to any of the streaming services, but more so just saying that yes, if you're going to have a product that nearly a billion people in this world are going to pay for in some capacity, then yes, it needs to attract the masses. And I think that a lot of the focus on this crystallized after Goldman Sachs a couple of years ago had put out that Music in the Air report had suggested that 20% of the people that currently subscribe to a paid music streaming service would identify as superfans. And those super fans would be willing to pay at least twice as much, if not more for some type of product that they could get pre sales to concert tickets, additional features, advanced releases or things like that. Not that I think the majors have pivoted away from the superfan tier and went towards looking at oh, SUNO has people paying $12.99 a month for this product. But I do think there is something there in terms of this and just how it's all bucketed.
- [07:06]
B
Even in early conversations about the superfan tier, I think, and again we talked about as audio modification was one of the things that was talked about is should fans be able to remix songs or change the verses or like whatever it was. And now that's sort of been repackaged into this AI strategy of partnerships with these generative platforms.
- [07:26]
A
What's your current read on the superfan tier right now? I'll let you know mine, I think, I think I'm a bit skeptical on whether or not it actually happens. Some of the challenge with just my overall take on Superfans itself is thinking that one product, even if Spotify, Amazon, Apple Music or others were to launch something similar, that this then captures that opportunity that Goldman Sachs is talking about. Because I think that the mistake in terms of the mentality of Superfans is thinking that there is one product that's going to serve all of these needs and that bundling them together is the solution. And what I think it's more like is there are different buckets. There's a market map essentially of what superfans look like. This superfan tier is trying to combine a few of them in one. And I just not sure if it's quite worked. And I think part of the reason that there's been such a delay in terms of launching it is because there is some disconnect, I think, right now between Spotify specifically and the major record labels in terms of both of their willingness to put this out there. But then additionally, these things actually coming to fruition because I think there's still a lot of skepticism about how successful they would actually be.
- [08:35]
B
I feel like it's something that on paper, everyone agrees with. Sounds good. You're trying to create something scalable for what is inherently a niche group of people and also a very, like, diverse niche. There isn't really one type of super fan. We've done studies on asking people what are their, you know, what are the top things that they want out of a subscription tier. And you could go for that top thing, but it doesn't actually reach the majority. It's. It's the most checked item. But, like, people's preferences can. Can vary a lot. Superfans are a niche, but they're also. There's also a wide range and spectrum of types of superfans. And so trying to create something that's scalable for that group just gets really, really hard in practice, even before you think about the licensing or, you know, the conflicting potential incentives of the DSPs and the labels.
- [09:19]
A
Yeah, I agree with that. And I think if we were to take a step back from this narrative and think about them in buckets, I would put creation platforms in one group of a superfan type of tier. Sunos, Udos, Splice, elevenlabs, Bandlab, they're in one bucket. Right? Then, of course, you have Live Music itself. Live Nation alone made $25 billion in 2025. You also have your DTC direct sales. That is a form of superfan, whether it's your bandcamps, your events, your merch, your vinyls, that type of thing. You have these fan clubs as well, Patreon and others. That is a form of super fan monetization. You still have the social platforms that exist today, people doing their own user generated content, Instagram, TikTok, YouTube, etc. And then I guess you could maybe say that some of these like fan capture CRMs are also a bucket of those, whether it's your Lelos or bands in towns. And that's how I look at the mapping. I know there's differences across those between whether these are products geared towards the consumers or the artist, whether or not these are revenue streams that the major labels participate in or don't participate in. But that's how I look at this landscape of what is that next tier beyond the lowest common denominator of streaming itself. And if we're looking at that as the total market, okay, in totality that is a pretty sizable market. But those are five, six horizontal markets. And I think the challenge is you're trying to have the Superfan app to capture the best mix of both of those. And that's where I feel the gap is.
- [10:56]
B
Yeah, the consumers who are super fans of music, who want to use generative AI music platforms are their own particular segment. The creator tools industry as a whole, like software and hardware. At media we estimated to be I think around like 6.5 billion in 2025, which is, you know, not a massive industry. So you see why these companies are going after consumers. But even there it's a niche of consumers that are using these platforms. So yeah, back to our original question, it's like how big can that actually get?
- [11:25]
A
Yeah, since you have the data, let's dig into the consumer piece of this because that's clearly the market that SUNO is after. And we named a few other companies that are after that. And Suno was one of the larger players in this space. We've seen some of the data that they've shared already. This is a platform that launched September of 2023. By November of 2024 they had 10 million users who had tried using the product in some shape or form. And then by October, November of 2025 they announced that they're doing $200 million in their annual recurring revenue. And that's also when they had raised their round that value, $2.54 billion. And then this past month, in February 2026 they announced $300 million in ARR 2 million paid users on the platform. And I wouldn't be surprised if they raise another round soon. That is probably closer to that 5 to 6 billion dollars range in terms of its valuation. And granted that is considerable growth. But I do think for them to be able to achieve that, it needs to expand beyond professional musicians that are using the product. It expand to be more of a true consumer product totally when it comes
- [12:43]
B
to the total addressable market. And also who are the active users? Which is another really key question with all of this is how many are coming back on a monthly or weekly basis? I mean, we've been surveying in our global consumer surveys quarterly about whether people use generative AI music platforms monthly, and the percentage has hovered somewhere between like 4 and 6% for the past three or so years. It hasn't changed that much. It's still very much a niche in terms of like when we categorize sort of consumer products. When we survey music creators and we survey thousands of them per year, most say when they use AI in their music, it is by far assistive AI tools that they're using. The top most popular is mastering, then it's stem splitting. Generative AI platforms are only in the single digits. In terms of the creators who say, yes, I use this in my, in my process. However, you and I continue to hear from everyone in the industry, oh, everyone's either using Suno or using it and saying they're not using it. That was from a prominent producer. Every radio song that's coming out in the next year was made using Suno. That was from a prominent songwriter. Like, are people just lying in the surveys? Are they just not wanting to say, even though there isn't really an incentive for that? I don't know. So it's really hard at the moment. And this is one of my challenges as a researcher and something I'm trying to understand better to get an accurate sense of how music creators are actually using these tools. Because you said a couple minutes ago, well, they're really serving creators. They need to expand to more consumers. But actually the perspective we get in the data is in some ways the opposite. It's that it's mainly consumers who are sort of casual, maybe experimenting with music and are super fans who are using tools like Suno, and that's driving the growth. Whereas professional music creators are actually in the minority of the user base.
- [14:40]
A
A few thoughts there. There was a quote directly from Mikey Schulman, the CEO of suno, who said that SUNO is the ozempic of the music industry. Meaning that everyone is on it, but not everyone is telling you that they're on you.
- [14:53]
B
Exactly.
- [14:54]
A
The second piece of what you shared, I would Put the users of Suno into five buckets. So there are the people that are using it as part of their creation stack, right? The same way they may use a tool like Splice or others. That is one bucket. There's also a second bucket that is the novelty use case. So if my kid is like, hey, I want to hear a song about us going on a bear hunt in Golden Gate Park, I've totally done that before. Yeah, right. There's a third bucket which is production music. This is the business that Epidemic Sound or Artlist have been in that have built very strong businesses offering right. Background to YouTube clips or any of that stuff. A fourth bucket, I would say is direct uploads to the DSPs, the music streaming platforms, for people to pull the music, the unwalled garden, if you will, and then being able to hear there. And then the fifth one is the consumption on the platform. This is the one that's interesting because there was a lead investor from Suno who had posted a lot of the listening that she's done on Suno has replaced the listening that she's done on Spotify, which is a very tough thing to hear if you're trying to make a case that you are fair use and you are not competing with the underlying music. And my read on just where the platform likely is is that the stickiest users are the professional users that are using it as part of the creation stack. But some of those others as well, whether it's the novelty or even the consumption on the platform, that can be a very high churn and go business. And how do you make sure that those users are sticky? Because I think the way that Spotify and the streaming services are able to do it is that there's a shared knowledge base and that people want to go back and listen to the music that they have. And even on TikTok, right, there's some shared knowledge space of people wanting to see what's happening or people creating their own things that is still connected somewhat. But if every sound is completely new and sure, some of it may feel derivative, I'm just not sure how that works out. But in order for them to justify the type of valuations you have, I think there's a lot to prove in order to get to that level. This episode of trapital is presented by linktree, the link in bio tool that lets artists house everything in one place. Streaming links, tour dates, merch videos, audience collections, socials and more. With 60 integrations across the platforms you already use, like TikTok, Instagram Shopify and Lelo. Linktree allows you to centralize your ecosystem, save time, and optimize your entire online presence from one place. Fans can tap one link and choose their preferred streaming platform, whether it's Spotify, Apple Music, Amazon Music, or any others. To easily listen to your releases and make discovery seamless, you can build hype before the release day with Spotify Pre save links and automatically use those to convert to streaming links when your track goes live. You can also own your audience by collecting fan emails and phone numbers directly through your link tree and build a list that you control instead of depending on algorithms. You can also see which cities engage most with your music, which links get clicked, and when fans are active. Plan your tours and releases Smarter. Use code TRAPITAL50 for 50% off your first three months of Linktree Pro. That's T R A P I T A L5O. You can get started at linktree.com or tap the link in our Show Notes. Terms and conditions apply. For more info, tap the link in our Show Notes to view the landing page. Let's take a break for our chart metric. Stat of the Week Harborview Equity Partners recently acquired a stake to select music and non music assets from the Quincy Jones estate. The crown jewels of the estate are the three studio albums that Jones made with Michael Jackson, off the Wall, Thriller and Bad and on Bad. Surprisingly, Dirty Diana currently generates more daily streams on Spotify than both Bad, the song from the album Bad and Man in the Mirror. It's a bit surprising, but with the upcoming biopic, there could be a number of reasons behind the surge for Dirty Diana. Let's get back to the episode.
- [19:20]
B
When you launch a product like this, you assume that it's going to be early stage music makers who use it, beginners who are just getting into music creation for the first time. But those people want to learn how to use the things. They might not necessarily want to generate the full track. They sort of cherish I think the process a little bit more. Whereas with professionals this is your job and you know that everyone else is using this tool and it's the best tool out there. You may be more likely to also use it in our surveys. Of course they tend they kind of skew towards lower earning music creators because it's really hard to get, you know, Benny Blanco to fill out a survey.
- [19:59]
A
Yeah, but I think like to your point too, there's only so many Benny Blancos out there and the product right now is built on scale and leaning into that. If they are hoping to have something that is of TikTok and of Spotify scale, then in the same way that TikTok or Spotify. Sure. Benny Blanco is just as valuable as a consumer on the platform as you and I are consumers. Yes, he's much more valuable as a creator of the underlying music that's being listened to, but as a consumer, he's. He's one, you know, no different than you and I are one. Even each of those use cases that I brought up that I mentioned, they all have different addressable markets and they're all horizontal, meaning that they're serving different use cases that are unrelated in a lot of ways. Right. Me using this as a novelty to talk about my kid's birthday party has nothing to do with Timbaland or Benny Blanco using Suno to help create the next biggest song. It also has nothing to do with the person runs a video ad agency that is just using production music and wants to try Sudo out instead of using Epidemic sound. And I could go on, but those use cases are not connected in the same type of way.
- [21:10]
B
Yeah. I mean, what do you think about Suno and other platforms like it also trying to appeal to more pros through launching sort of like a DAW alternative Suno studio, which is sort of geared towards the more professional creators who want to not just generate, but maybe have a little bit more. Have a lot more control.
- [21:30]
A
I think it makes sense from a gross numbers perspective. You want more of the consumer audience because there's just more of them. You also still need to have a sticky base of users that you can go to time and time again that are less likely to churn. And to do that, you do need to have some of these strong users. So I understand that this may contradict a bit of the Benny Blanco example that I mentioned earlier. And it doesn't need to be someone at his level. It can be. You know, there are plenty of people that we don't know or aren't household names that are making very comfortable livings using these types of platforms.
- [22:04]
B
Yeah, yeah. I love Shout Out Benny Blanco. Our like go to example for this for some reason.
- [22:10]
A
I know you mentioned them. You mentioned him. Yeah. Benny Blanco's greatest hits playlist on your. On your Spotify.
- [22:16]
B
He was on the brain.
- [22:17]
A
I don't know why do you look differently at some of the other platforms out there, like 11 labs or yu Dio? Obviously they're both different in a lot of ways, but do you have any more unique, specific takes on them and what their role is?
- [22:31]
B
Yeah, I feel like Suno and Yurio are really kind of the two big consumer propositions and they're similar in a lot of ways. Except of course at the moment, the walled garden versus not walled garden piece, the sort of wild garden approach is interesting to me because I get the instinct to want to cut off the ability to distribute this music. Especially at this point where it still feels, even though we're past, like the real Wild west moment of this, we're still a little bit in there for still a little bit in the Wild West. It feels kind of scary to say, yeah, sure, release this music anywhere when. When we don't. We don't even all agree with what a derivative is in legal language and things like that. There are ways that I think it's a risk because if it does encourage people then to just stay on that platform potentially and use it as the place they're consuming and creating and could end up competing with streaming time in a different way. Like, rather than these creations going on streaming and diluting the royalty pool, you actually have people spending less time maybe on the platforms. And this idea that creation is competing with consumption, that is still, I think, really early days. Although I'm quite bullish on the overlap between consumers and creators and how that's been an ongoing trend. The keyword is ongoing. It's been like slow and steady. I don't know how close we are to the point where people are spending so much time on Suno that they might stream less. But yeah, it has all these really interesting sort of second order impacts. Like, even as I'm just saying that, I'm realizing, well, if more people spend time streaming on Suno and less on Spotify, the royalties, like the way that royalties are distributed from Spotify could actually be better for the majors because there's less people listening and there's a greater share that's going to the hit. There are a lot of of future intended and unintended consequences that come out of it. And I feel like maybe we haven't investigated all of them enough or like thought far enough into the future of that.
- [24:24]
A
That last point you said was essentially what Robert Kinsel had said in his shareholder letter, specifically about AI Music. And if it's being derivative off of the biggest hits, he sees that as being more of a potential value add than the baseline of streaming the way it is today. I think it's clear that for at least Universal and Sony right now, the two companies that have not done these partnerships with Suno, I'm not quite sure how it's going to play out. Because I think their ideal step forward is that, okay, if we are able to agree on who owns the underlying copyright, how to then attribute the derivative profit sharing or revenue sharing, revenue generating splits based on who has what, then I'm sure that everyone would feel happy about it. Right. That's probably what a lot of the folks are waiting for. I think the other interesting thing that I picked up on from the letter that Kinsel had shared was he had this line in here that did talk about the economics specifically and he talked about the AI deals and he said, quote, all of our deals are based on variable economics, enabling us to grow as our partners do, end quote. And then similarly, Crystal Robinson asked Mikey if Ward Abuser Group owns any equity in Suno, and he didn't directly say no. His answer was something along the lines of it's a little too early for that. You know, we'll see and maybe we'll have more information to share at some point. I'm sure that Warner wants this. Right. So there's something to be said about the same that the majors had equity in Spotify. Is there some similar type of dynamic here that's in place?
- [25:55]
B
Totally. The first priority is of course protecting sort of existing streaming economics, which makes sense, but it also means that we're making these decisions on what the next decade of music consumption will look like based on the idea that the dominant DSPs today will be the dominant platforms for music fans and consumption in 10 years or beyond. That, if we make decisions only based on how the landscape looks today and not how, you know, leaving enough room for how it might look in 10 years, we might end up in a tough position.
- [26:28]
A
Yeah, there's another angle of what you're saying, because how long is streaming going to be the dominant format? Right. And right on. On one hand, Spotify is a company that launched in 2006 and launches in the US in 2011. This is year 1516, and it's arguably stronger than ever. Which format in the history of this business has been on year 15 and has been stronger than ever?
- [26:51]
B
None.
- [26:52]
A
You could make a case that, okay, if you're talking about CDs and the 80s being the origins of CDs and then 2000, 1999 being the peak. Sure. But I think even then there were some signs there. Even without Napster, there were signs there that they had milked as much of the cow as there was to milk, selling all the greatest hits albums and all the fluff that was there. There's only so many times People are going to rebuy what they already owned on cassette in streaming. If the biggest story is that the growth is slowing down but not that the churn is necessarily increasing, then that's a slightly different scenario to be in. But on the other hand, format changes have always happened and will always happen.
- [27:32]
B
It's hard to think about what could come next. I think we have to leave open the possibility that streaming might not be sort of the final format for music consumption.
- [27:42]
A
Yeah, I think even specifically with this conversation, there clearly is a market for the type of product that Sudo was put out there and any of these other generative AI music platforms as there has been for anything that is trying to reach this quote unquote superfan type of audience. And not that I think that's that's what Suno's trying to do, but I'm more so framing it in terms of the lens that the major record labels are trying to sell. This probably unlikely that this level of creation is going to be the answer for the major record labels to capture the opportunity above and beyond streaming. Yes, I think it'll be part of it, but it'll be part of it in the same way that Merch will be part of it. It'll be part of it the same way that finals to be part of it. Right. I'm sure they wouldn't want to hear that because if Wall street thought that then the stocks would have an even further discount than they do now. But I think that's just probably part of the reality because yes, I do generally think it makes sense that 20% of the people that listen to music could probably be some level of super fan. And to be honest, 20 might be like too neat of a number. Like it almost sounds too neat. Like why isn't it 17.5%? But how they leverage that and how they capture that can look very different. I think there's going to be even more wide range of use cases at that Dex level, especially for the purposes of what Warner, Sony or Universal Music may need. And then if we think about it that way, that could also only be a portion of the business that a pseudo or others have in the future. Right. We look at Spotify, sure. I think a majority of the revenue is still from music, but audiobooks and podcasts and other non music audio is a non insignificant share of that. Is there some other type of use case that a Sudo or Yuio or others can have? So I think that'll be interesting to see. Right. Because it's like everyone needs each other to some extent. There's overlap. Is there pretty large. But can each side show that, okay, the use cases are fragmented enough that they are solely dependent on one another?
- [29:47]
B
Yeah, there isn't a silver bullet. There's not one thing that, okay, this is. Super fans are going to save us. This is going to save us. That there isn't one thing that is going to change the game. It's more likely, I think, going to be a combination of many different ways of engaging superfans, with potentially AI and consumer creation being one of them. It doesn't necessarily mean it's going to be that one. One thing that, you know, is the main revenue driver going forward. I think that it's like a lot more diversified than that, which is the point, which is a good thing, which is kind of what the industry needs
- [30:20]
A
is diversification for these music companies. And to be clear, not even just the major record labels, any of them. The more that they can prove that they are not solely dependent on Spotify or YouTube one way or another, I think the stronger they'll be.
- [30:34]
B
Yeah, agreed.
- [30:36]
A
Anything else before we close things out?
- [30:39]
B
Yeah, it feels like the rest that there is to talk about is yet to be seen, sort of. So, you know, we'll see where the story takes us. And thanks for having me.
- [30:48]
A
Indeed. Of course. Thanks, Tati. Appreciate you coming on.
- [30:50]
B
Thanks, Dan.
- [30:54]
A
And that is a wrap. I hope you enjoyed this one as much as we did. Thank you, Tati Sirisano. Thank you to our audio and video producers, Eric and G for everything that you do to help make trapital possible. Thank you to our sponsors and thank you for listening. If there's one person you know that would really enjoy Trapital and get a lot out of this episode or any of the conversations that we have on the show, send them a link to the show. Word of mouth is still the best way to grow, so if you can spare a few minutes and share it with someone you know, that would be greatly appreciated. And if you haven't already, make sure that you're a subscribe to the podcast, press that follow button on Spotify, Apple, wherever you get your podcast. B leave a comment on the podcast that helps more people see what people really enjoy about trapital. Or C leave a review or rating that helps the algorithm do its thing and make sure that trapital reaches the right people. Thanks again. Talk to you next time. If you love listening to Trapital, I want to put you onto another podcast that I think you'll really enjoy. It's called One Song it's hosted by Diallo, Riddle and Luxury. Each episode unpacks one iconic track. They break down the original musical stems so you can hear how the song was built, while also diving into the creative choices and cultural forces that shape the song. If you're into how music, media and culture intersect, this show is very much in that lane. You'll hear songs you already love in a completely new way. Check out one song wherever you get your podcasts.