Weeks after Universal Music Group (UMG) signed a deal with Amazon Music to collaborate on what it refers to as Streaming 2.0, it has now signed a similar multi-year agreement with Spotify.
Spotify which has 640 million monthly active users will collaborate with UMG to “advance the next era of streaming innovation.”
The Swedish streaming giant said that artists, songwriters and consumers “will benefit from new and evolving offers, new paid subscription tiers, bundling of music and non-music content, and a richer audio and visual content catalog.”
The agreement establishes a direct licence between Spotify and Universal Music Publishing Group across Spotify’s current product portfolio in the US and several other countries – although it isn’t clear at this stage if Australia is among those countries.
Spotify is keen to position the agreement as one that focuses on the two company’s commitment to “artist-centric principles” and one that would ensure artists continue to be properly rewarded for the share of audience engagement that they drive. It aims to ensure that the artists’ streaming royalties remain protected through the platforms’ fraud detection and enforcement systems.
UMG’s Streaming 2.0 vision which it unveiled to investors last year and has referenced at the time of announcing the Amazon and Spotify deals, envisioned a “Super-Premium” subscription for superfans that could mean things like early access to music, exclusive deluxe editions, hi-res audio, and artist Q&As, according to The Verge.
“When we first presented our vision for the next stage in the evolution of music subscription several months ago — Streaming 2.0 — this is precisely the kind of partnership development we envisioned,” said Sir Lucian Grainge, Chairman and CEO of UMG in a statement regarding its latest Spotify deal. “This agreement furthers and broadens the collaboration with Spotify for both our labels and music publisher, advancing artist-centric principles to drive greater monetization for artists and songwriters, as well as enhancing product offerings for consumers.”
In Australia, Spotify’s premium plans begin at A$6.99 for students and climb to A$23.99 for the family plan.
In November, Spotify announced that in the third quarter of last year, paying subscribers grew to 252 million, which surpassed analysts’ estimates of 250.1 million. It now needs to keep growing its paid subscriber base. The deal with UMG is expected to keep that momentum going, with the company’s share price having climbed more than 135% over the last year.
“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,” said Daniel Ek, Spotify’s Founder and CEO.
