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Twitch already provide such a thing. https://blog.twitch.tv/en/2020/09/30/introducing-soundtrack-...

Except I have a friend who streams on regular basis and got his stream muted while playing songs from Twitch’s own streaming service. Wouldn’t recommend using that at the moment.

There used to be something like this, the pod safe music network. https://en.m.wikipedia.org/wiki/Podsafe_Music_Network

Alternatively, is there a way to license music for streaming on twitch?

At least for professional streamers, that would make sense and it could align their goals with those of the music industry.

pretzel.rocks is a great company doing just this for streamers, I have no stake in the business I just know the founders and they're great people who truly care about content creators and musicians alike.