Yes but I don't want to hear some anonymous background music.
A better example would be Spotify replacing artist-made music recommandations with low-quality alternatives, to reduce what it pays to artists. Everyone except Spotify loses in this scenario.
My prediction is that personal generation is going to be niche forever, for purely social reasons. The demand for fandoms and fan communities seems to be essentially unlimited. Big artists have big fandoms, tiny ones have tiny fandoms, but none of that works with personalized generations.
Well, maybe. But there are overwhelmingly large numbers of people who want to be in a fandom, and that means being fans of some shared thing. Maybe that shared thing will be AI generated, but it won't be a world of solipsists.
Communities around fictional universes are already fractured and shrinking in member size because of the sheer number of algorithmically targeted universes available.
Water cooler talk about what happened this week in M.A.S.H. or Friends is extinct.
Worse, in the long run even community may be synthesized. If a friend is meat or if they're silicon (or even carbon fiber!), does it matter if you can't tell the difference? It might to pre-modern boomers like me and you.
I think things will look a lot more like Vinge's Rainbows End than everyone burrowing into their own personal algoentertainment. I can't speak for GenZ but when D&D can sell out Madison Square Garden, there doesn't seem to be any softening in people's interest in fandom.
Virtual influencers might be a big thing, Hatsune Miku has lots of fans. But it's still a shared fandom.
But availability of new works shall change once the floor of how popular you need to be to survive off of art will change and it will, since not everyone will care. Taylor Swift will be fine either way, but it's not about her.