Spotify and Universal Music Group strike major multi-year deal

The new agreement establishes a direct licence between the streaming giant and the world’s largest music company.

Music streaming service Spotify has inked a major deal with Universal Music Group, with the aim of advancing “the next era of streaming innovation”.

The two companies have reached a multi-year publishing agreement, which will see new subscription tiers and a “richer” content catalogue.

The deal will also establish a direct licence between the two companies across Spotify’s current product portfolio in the US and several other countries.

As part of the announcement Spotify said the new agreements “renew the companies’ commitment to artist-centric principles”, ensuring that artists are properly rewarded for the share of audience engagement that they drive.

Daniel Ek, founder and CEO of Spotify, said the company has been committed to the return of growth to the music industry.

“This partnership ensures we can continue to deliver on this promise by embracing the certainty that constant innovation is key to making paid music subscriptions even more attractive to a broader audience of fans around the world,” he said.

Universal Music Group’s chair and CEO Lucian Grainge said the agreement will advance “artist-centric principles to drive greater monetisation for artists and songwriters, as well as enhancing product offerings for consumers”.

While the companies have heralded the deal as the next era of streaming innovation, this streaming era has not come without its criticism.

Just last week, musician Björk said Spotify is “probably the worst thing that has happened to musicians”, adding that the streaming culture has changed an entire generation of artists.

The Swedish streaming platform also landed in hot water last year for its music-audiobook bundle, which many feared would lead to lower royalty rates for US songwriters.

The controversial deal led to the National Music Publishers’ Association in the US filing a complaint with the Federal Trade Commission, saying the bundling of audiobooks and music would “cost consumers millions of dollars, undermine the music royalty system and harm competition”.

However, according to Variety, sources say the new deal with Universal Music Group improves some of the payment structure from last year’s bundling deal.

In a separate statement, a spokesperson for Spotify also said the deal has evolved to “account for broader rights, including a different economic treatment for music and non-music content”.

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