The music industry’s future hinges on data clarity and AI governance, according to Varghese.
Hypebot’s Future Predictions series has returned, offering insights from top industry analysts about what lies ahead for music in 2026. Jacob Varghese, founder of Noctil, a metadata management platform, weighs in on the pressing challenges and opportunities in the music sector, especially with the rise of artificial intelligence.
With over 24 years in technology, Jacob launched Noctil to address inefficiencies within royalty revenue systems in music and audiovisual industries. His aim is clear: ensure that rightsholders receive fair compensation for their creative works while making technological advancements accessible to all. As the industry evolves, Varghese believes several key trends will shape its future.
One of the most significant changes he foresees is a shift away from mere copyright discussions toward robust data-level enforcement mechanisms in 2026. He highlights a substantial increase in AI-generated tracks, with estimates suggesting that up to 40,000 such tracks could be uploaded daily by late 2025. This presents a pressing need for transparent data fields that distinguish between AI-assisted and fully AI-generated content. Proper attribution and payment mechanisms must be put in place to manage the growing volume of AI outputs, turning potential crises into organized frameworks.
Furthermore, Varghese points out a critical vulnerability in the industry: unrecognized revenue from micro-transactions, particularly in fast-growing sectors like short video and gaming. He emphasizes the necessity for standardized metadata to capture this value effectively, suggesting that the licensing process should be industrialized to enhance efficiency and revenue capture across various platforms.
As global music operations expand, so do the complexities associated with fragmented data. Varghese argues that adopting universal standards and ensuring data interoperability have become essential for the music industry’s survival. Without streamlined global delivery workflows, data silos will hinder payments and overall operational success.
Investment trends also feature prominently in his predictions. With music increasingly recognized as a tradable asset, the industry must ensure its underlying royalty and ownership data is accurate and trustworthy. Losses due to unclaimed royalties, estimated at around $2.5 billion, illustrate the need for improved data governance.
Jacob also highlights growth opportunities in emerging markets across Africa, South America, and Asia. As these regions lead the global growth charge, music infrastructure must adapt to their unique rights and payment systems, ensuring accurate revenue collection and distribution.
Lastly, Varghese envisions a future where AI’s role shifts from creation to rescue. He predicts the growth of AI tools aimed at automating workflows to tackle the substantial data challenges the industry currently faces. By utilizing advanced AI models for tasks like data validation and reconciliation, the sector can enhance operations and accelerate royalty distributions, enabling more resources to be funneled back into creative pursuits.
