Streaming services can host generated music without difficulty. Paying for it correctly is where the system strains, because royalty infrastructure assumes facts about a recording that generated tracks do not supply.
The system is built on two separate rights
Every commercial recording carries a composition right, covering the underlying song, and a recording right, covering the specific performance captured.
These are administered by different organisations, with different registration processes and different payment flows.
A generated track has a recording that plainly exists and a composition whose authorship is unclear, so half the system has nothing to attach to.
Registration requires named shares
Collecting societies pay against splits: named writers with percentages that sum to a whole.
A track produced from a text prompt has a person who wrote the prompt, a company that built the model, and an unbounded set of works that influenced the output.
The registration form has no field for any of that, so the practical outcome is that the prompt writer registers as sole author or the composition is never registered at all.
Unregistered compositions accumulate unpaid
When a recording is streamed and no matching composition registration exists, the associated money does not disappear.
It sits in unattributed pools, which are eventually distributed by market share to rights holders who did register — meaning it flows to the largest catalogues.
Generated music at volume therefore transfers money toward incumbents through a mechanism nobody designed for that purpose.
Fraud detection catches legitimate output too
Services police artificially inflated streams by looking for signals such as high upload volume from one account and low listener diversity.
Generated catalogues produce those signals honestly, since a single creator can release far more material than any conventional artist.
Uploads are withheld or removed on suspicion, and the appeals process assumes a human performer who can document a session that never took place.
Copyright status determines whether payment is owed at all
Several jurisdictions require human authorship for copyright to exist, and a work produced without meaningful human creative input may have no protection.
An unprotected recording can still be streamed and can still generate a payment under a service agreement, because that payment is contractual rather than statutory.
The consequence is a category of music that earns from platforms while being freely copyable by anyone else, which is an arrangement the existing structures have no settled way to handle.